Last month, Mint did a feature on Hits and Misses in the Indian Startup universe. It was a great opportunity to take stock of reality, since most of what we read about in the mainstream media is a function of “survivorship bias”. Here are some interesting statistics from that story…
- The E-commerce sector alone has raised over $11 billion over the past decade – roughly 75% of the funds that have been raised by Indian start-ups during that period
- Of the $11 billion, Flipkart Internet Pvt. Ltd has raised more than $4.5 billion, and is now India’s most valuable Internet company at $11.6 billion
- The top five most-funded start-ups in E-commerce to have shut down had raised $51.1 million in total, which doesn’t include the distress sales of companies such as Letsbuy and SherSingh
- $3.1 billion (including debt) was raised by Digital Payment startups, making Paytm – now valued at $7 billion – India’s second-most valuable Internet company
- Of the 192 companies founded in the Cab Hailing category since 2007, 76 have shut shop; Ola is currently valued at $3.5 billion
- Nearly 310 start-ups in Healthcare, of 2,678 founded since 2007, have shut shop; Practo, 1MG, Portea are the top startups in this segment
- As many as 2,460 ventures in the Edu-tech / Education space incorporated since 2007; about 224 have shut down
- Of the 2,420 start-ups founded in Hyperlocal (home services+food tech+delivery) since 2007, 780 have shut shop
- As many as 514 ventures tried group buying model one way or the other, but at least 221 shut shop
Think about those statistics for a moment; There are plenty of lessons to learn from. Here are some of my personal takeaways…
- A healthy dose of funding was available to those who ventured out and attempted to create an organization of value
- The best known in each segment typically finds it a bit easier to gain preferred access to investors, markets and customers, simply by virtue of their size and brand salience
- Path-breaking, innovative ideas executed well are not the only recipe for success; Addressing a customer gap with great execution at a profitable price point can work wonders too!
- Despite significant resources at their disposal, and addressing a real customer need, countless startups did not survive the past decade
For some of you dreaming of launching a startup, posts like these may signify doom and gloom. For others, it will probably provide the inspiration to soldier through.
The fact is, not every venture is meant to succeed and not every startup will fail. “There is nothing in a caterpillar that tells you it’s going to be a butterfly“, said R. Buckminster Fuller. For me, the biggest lesson buried in these statistics is that building a successful organization takes decades, not years. There is simply no shortcut to it.