The ‘startup saga’ has been the most trending topic in the business world today. With widely appreciated path-breaking steps from the government, support from prominent stakeholders from India and overseas, inspiring success stories have motivated many new entrepreneurs to jump on the bandwagon and race to success. However, one thing which needs to be noticed is the rate of failing startups. Yes,90% of these have failed to etch the fairy tale ending owing. Though a myriad of factors has been branded as culprits that include lack of funds, no exposure to real-time scenarios, poor workforce yet the main reason is the lack of innovation.
Yes, Innovation! Today’s budding startups do every possible thing to be the successful one but they forget to innovate.
“The idea of being a startup is – be agile, think beyond the norm, experiment and change the status quo. If a startup does not experiment and innovate, then they lose the true essence of their being, says Monika Misra, Founder and General Manager, iKeva.
Lack of Innovation Leads To Startup Shutdown
If we look at the 2016 NASSCOM report, it states that the reason behind the failure of startups is none other than lack of innovation which has led some startups to shut their shop within a few years of their inception.
In 2016, it was reported that between January and August, 29 startup shutdowns in India took place. Startup shutting their shops in 2017( from January to June) have a no different story to tell. Until June 2017, the year has seen the total of 8 startups closing down their operations and winding up some part of their business. The Stayzilla shutdown has been the most talked about affair.
“The failed startups can place the onus on being repetitive either by lifting successful ideas of the West or just being clones of already successful ventures. These plagiarised ideas fail to hit off and tank as fast as they promised to shoot up. They fail to impress as they don’t make it to the product market fit as the wary customers fluctuate between innovation and trusted brand names,” says Sunil Gupta, Founder and Director, ExportersIndia.com.
Another report by IBM Institute for Business Value and Oxford Economics also highlights high lights lack of innovation as the main cause of the startup failure. The Report states that more than 90% of startups fail within the first five years due lack of innovation. 77% of venture capitalists surveyed believe that many Indian startups lack pioneering innovation based on new technologies or unique business models.
“A business needs to innovate in order to be relevant. Taking into account the growth of my own company, the success of Streamlyn can be contributed to the advancement in the technology behind its proprietary products namely BidsXchange (demand side platform) and StreamX (supply side platform). The products are powered by artificial intelligence and machine learning, proving to be an aid for both advertisers and publishers get the best return on investment out of their campaigns. Hence, there is a substantial need to keep up with the demands of the modern era, says Raja Chakrabarty, Co-founder, Streamlyn.
What Needs To Be Done
The startup is synonymous with innovation because either the business model or the product itself is innovative. But there are times some entrepreneurs lack imagination and others too scared to try out different things. they either try an emulate another successful startup or get immersed in day-to-day activities and forget to think. Sometimes they are driven by the need to be successful and sometimes by lack of time. This is what creates the competitive advantage, what allows them to stay ahead of the competition, ahead of emulators.
According to Gopikrishna Lingala, Co-founder, Leanspoon, the reason behind a startup’s success is Innovation. “Those that innovate continuously on the product and on commercialisation are often the ones who stay in the market, some becoming Unicorns. Ignoring innovation for growth, or vice-versa, is the first sign of decline,” says Lingala.
Startups Need To Focus On:
Vision: A startup needs to envision how to monetize and channelize profit on every avenue they venture into- from the beginning. Good things start early and startups should have a clear picture in mind.
Skill: A sign of a successful organisation is making the most of the time and the value of time is immense in the current competitive scenario.
Budget Masters: A booming startup is competent in supervising its finances, operating in the cleanest capital. “When resources are limited, and time is of the essence, companies need to know what they require,” says Chakrabarty.
Discipline: Self-discipline eventually leads to positive work ethic, which aids in getting things done effectively and efficiently.
Determination: A successful startup lays great emphasis on the significance of determination when building a long-lasting business and never quits mid-way, especially when the road gets turbulent and scary. “ An entrepreneur has to dedicate time to think, create and recreate and has to encourage their teams to do the same. that’s when innovation becomes a key element in a start-ups DNA,” says Misra.
Necessity is the mother of invention: To appeal to the audience the need factor for the product/service is indispensable. “Ease, comfort and pocket-friendliness follow suit. It is important to not go the trusted ways but to take the rugged path of innovation with some risks and passion for excelling if one wants the startup to be the success story,” says Gupta.
Successful startups are always looking for opportunities to do something better than the competition. They can continue innovating by conceptualising outside of the box and constantly questioning the status quo. They can learn from their committed mistakes as they continue their long, challenging yet fruitful journey.