Startup Failures & Hidden Secrets - By Balakumar Ravichandran - 10Oct2016

Connecting the Dots
“Startup Failures & Hidden Secrets”
10-Oct-2016
© Startup Failures & Hidden Secrets By Balakumar Ravichandran Mobile: +91 9901919109 Mail Id: balakumar.ravichandran@gmail.com

Startup Failure Rate was at ~90% in Jan 2015, currently at
~95% and increasing YOY.
1. Why startup failure rate is increasing YOY?
2. What are the genuine reasons?
3. Aren’t we seriously ignoring the actual truth behind increasing startup failures?
Forbes: 90% Of Startups Fail
© Startup Failures & Hidden Secrets

Other Key Reasons: http://artofvc.blogspot.in/2014/10/why-startups-fail.html
Top Reasons for Startup Failures

If these are the top reasons for startup failures and is readily
available all over the internet for the entrepreneurs.
Then what is stopping them to succeed?
However, if these known factors are not really helping the
entrepreneurs, then are we seriously ignoring the actual reasons.
Let’s explore some of those ignored reasons.

Ignored Factors Leading to Startup Failure - 1
The Personality of the Founder
The personality factor definitely plays a very important role in any
organization. The founders are the face of the organization. The
founders should either fall under the “Creator” or “Influencer”
personality group, according to the “Think Theory – By Balakumar
Ravichandran”. (Click on the link and read the Think Theory)
"Think Theory” is a unique way to discover one's personality, based
on the characteristic distribution between “Your Ability to Think”,
“Willingness to Listen” and “Self-Righteousness”.
In a business scenario, an individual who does not fall under “Creator
or Influencer” personality group, should ideally be an employee
working for an organization, instead of starting up something on their
own.
To build a successful startup it requires more than a potential
business idea. It starts with the founders and their personalities.
"Think Theory", a copyrighted work of mine.

Vision Statement of a Start-up
Vision of the Founders
(Desire)
Vision of the Organization
(Intent)
Ask yourself, why do you want to startup? And are you aware of these 2 Vision Statements?
Vision of the Founder (Desire): Driving factors – Want to be the Boss, Gain Name, Fame & Recognition in the Industry, Material
Gain, Make Money, Passion towards a cause or etc.
Vision of the Organization (Intent): Driving factors – To solve a critical business problem, To disrupt or change the current
business practice for the betterment, Work for cause and etc.
A Startup might definitely fail, if the Vision of the Founder (Desire) and the Vision of the Organization (Intent) does not travel
together. The only driving factor that binds the vision of the founder towards the vision of the organization, is the founder’s
passion towards the Intent and a genuine reason to solve that specific business problem.
“Serve the Intent first, your Desire will follow automatically”

Passion Element
Artificial Passion Natural Passion
Ask yourself, are you really passionate towards the business problem your are trying to solve?
“Passion is a strong feeling, emotion, intense desire which gives the drive to an individual to achieve something.” An individual
will be able to develop passion towards something naturally, only when the intent or the purpose or the objectives are clear.
Unfortunately, the word “Passion” has become very artificial in the start-up world, as it is the most expected & demanding
characteristic from every founders today. Hence, many are forced to fake or develop an artificial passion towards what their do &
towards their venture. Which might not help the founders to achieve the expected success from their venture. “Do what you
love to do. Find your true passion. Make a difference. The only way to do great work is to love what you do.” – Steve Jobs.
According to my “The Five Finger Theory for Success” – Passion is the key to success. Passion is the only factor that drives the
individual to learn, keep them motivated in their Ups & Downs and provide the required perseverance to go the extra mile.
"The Five Finger Theory for Success", a copyrighted work of mine.

Founding Team Vs Product/Solution
Founding Team Product / Solution
Ask yourself, why some of the great product startups failed?
“Not the Right Team / Poor Hiring” is one of the Top 3 Reasons for Startup Failures, in most surveys conducted.
If you can answer the above question, then you know what it takes to succeed in your startup journey. Yes! Founding Team scripts
the destiny of the startup.
It really requires a complementary pair of founders to balance out the odds in the startup environment. “2-3 heads are better than
1 head”. A Business Man, A Sales Guy and A Techie is a Perfect Mix. Remember these 3 roles are high intense and mandatory skills
for the founding team. Never Ignore Sales, but a Techie is an optional. “Steve Jobs or Jack Ma had never wrote a single code.”
Many founders (especially Techies) ignore the importance of a Sales Role in the founding team, and decide to hire an external
resource to fill the gap. Ask yourself, would you prefer to take your sales guy along with you, to pitch to your investors?

Team – Part 1
Pedigree
(Good to Have)
Passion
(Must to Have)
Ask yourself, what do you really expect from your team? Or look for while hiring for your organization?
“Not the Right Team / Poor Hiring” is one of the Top 3 Reasons for Startup Failures, in most surveys conducted. Why?
The importance given to Pedigree in the start-up ecosystem, has completely blinded the value of Passion. The value for Passion is
really dying day by day. Pedigree can never outperform Passion. Passion + Pedigree is the one you should look out for. Pedigree
alone will lead to disappointment at both ends. (Passion here refers to an individual who is passionate towards the vision of
organization). 80-85% of Startups are founded by alumni's of top colleges in India & globally and why 90-95% of startups still fail?
Let’s say you hire an Individual with strong pedigree paying top notch salary. Will he be able to perform and give his 100%, if his
passion is something else. He might somehow manage to meet your expectations, but definitely not to his best potential.
Similarly, an Individual who is passionate towards the vision of the organization, will be willing to walk the extra mile.

Team – Part 2
Successful Professionals Failed Professionals
Ask yourself, why do you need or look for successful professionals at your organization?
“Not the Right Team / Poor Hiring” is one of the Top 3 Reasons for Startup Failures, in most surveys conducted.
“Run Out of Money” is also one of the top 3 Reasons for startup failures. Then, why spend the money unnecessarily?
In the current start-up environment, witnessing 95% of the start-ups fail and fund rising challenges; how many start-ups have
excess money to hire top and very successful talents? In addition, they come with a baggage and high financial expectations.
You will get the answer, if you are able to link the above reasons for startup failures “Not the Right Team & Run Out of Money”
Now why to look for Failed Professional (Particularly Multiple Failures) – They have genuine purpose to fulfill, “Desperate to
create an identity for themselves and never want to witness another failure in their Career”. “Learn from your Failure” when
you fail, “Learn from your failed colleagues” if you don’t want to fail.

Innovation Vs Disruption
Ask yourself, if the vision of your Organization, is to Innovate or Disrupt ?
“Get Out-Competed” is at the 4th place of the Top Reasons for Startup Failures with 19%.
What does that mean? Innovation get out-competed by another Innovation. Innovation is Inevitable, Innovation is Constant.
“Disruption can really hurt, if you are not the one doing the Disruption” – Clay Christensen
How many founders and entrepreneurs visualize a need to build a product, designed to disrupt the existing solution / system.
Most of us are still stuck with just creating Innovation. But, Disruptive Vision & Disruptive Innovation always keeps you ahead
of your competitors.

Problem to Solve
Technology Problem Consumer Problem
Ask yourself, are you solving a Technology Problem or a Consumer Problem?
“No Market Need / Building Something Nobody Wants” is the Top Most Reasons for Startup Failures with 42%, in most surveys
conducted.
The entire corporate world today talks about “Technology Interventions”, without realizing how much of Technology is required to
solve a specific problem and without realizing technology is just an enabler. "Too much or too less of anything spoils
everything". Technology (IOT) Revolution has just began and we have a long way to go, so take it slow.
If your startup is technology intense (B2B), then focus more on Technology & Sales. If your startup is consumer intense (B2C), then
focus more on Market Research, Marketing, Consumer Trend & Behavior, Execution, Operations and less on Technology.
The reason for many consumer startup failure is purely because of the solution being technology intense and complex for end user.

EQ Vs IQ
Emotional Quotient Intelligence Quotient
Ask yourself, do you take business decisions based on your EQ or your IQ?
This is definitely very tricky question.
We Indians, as a default we are more emotional than people across the world. It is
great to be emotional, but unfortunately we are also taking the EQ factor to Work &
Businesses.
A Startup venture is a Pure Business in this competitive world, which requires IQ –
Logical & Analytical Thinking, Decision Making, Problem Solving and etc.
Though, we Indians have strong roots, our weakness is our emotional attachments.
You should learn to balance your EQ & IQ to succeed in your Startup Journey.

Other Factors Influencing Startup Failure - 10
Problem &
Solution
Business
Model
Revenue
Source
Product
Pricing
Domain
Expertise
Strategies
Industry
Trend
Target
Customer
Astrology
Mentors &
Investors
Location
Wrong
Timing
Ignoring
SWOT Analysis
Competition
Fear of
Failures
Ignoring
Mistakes
The above listed other factors (in no particular order and not limiting to only these) influence and play a vital role to decide the
destiny of a Startup. Each of the above points have a it’s own depth and hidden secrets which are completely ignored, which has to
carefully analyzed and executed. The reason for a startup to fail can be multiple or even one single factor listed in this presentation.
As a founder, if you feel something is going wrong in your organization and if you are unable to identify where you are going wrong,
consult / seek help from an Industry Expert, Mentors and your Investor immediately. Don’t be afraid to ask for help.
Never forget “Ignoring your connections and network” is also listed in the Top 20 Reasons for Startup Failures.

Brief about Myself:
I had been a startup aspirant since 2009, explored and worked with couple of early stage startups, completely engaged and
contributed at a strategic level, everyday was a roller-coaster ride with high hope of succeeding one day. Unfortunately, none of
them really made it big and that one day never came. Back to back failures was very frustrating. Failed to create an identity for
myself. Sacrifices, Disappointments, Critics, Financial Crises were part of my start-up journey. I was open to fail, I was aware 9/10
startups are expected to fail. Had no regrets, rather feeling proud to have taken those risks. My ultimate takeaway was humongous
learning experience.
Being a victim of this startup-phobia, I was very curious to understand the hidden truth, why many startups fail? I didn’t have an
answer then. Spoke to few senior leader, none of them gave a convincing answer. I decided to discover it all by myself, from my
own experience, learning and by mere connecting the right dots.
I would like to dedicate my findings to all the Startup Aspirants, Entrepreneurs and to the Startup Industry.
Objective of sharing my findings:
• To help many aspirant entrepreneurs to understand what it actually takes to Startup.
• To help many founder who are struggling to discover what it takes to achieve success in their Startup Journey.
• To reveal the secret of solving problems, by mere connecting the right dots and
• Also to caution about various risk factors involved in starting up, it is definitely not that easy, as we perceive it.
“The root cause for any problem, lies beneath. You will never be able to find it on the surface, dig deep”

“When all think alike, then no one is thinking”
Thank You!!!
Please feel free to contact me for any startup strategic consultation
By Balakumar Ravichandran Mobile: +91 99019 19109 eMail: balakumar.ravichandran@gmail.com
I personally thank each and everyone one of you,
spending your valuable time reading this document.
Your feedbacks will be valued and appreciated.

Startup Failures & Hidden Secrets - By Balakumar Ravichandran - 10Oct2016

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