Almost 99 per cent of start-ups fail. This is how hard it is to be an entrepreneur.
So, what does success look like? Are there any global benchmarks to define a roaring success or a dismal failure or something in between? The short answer is ‘no’.
Hence, founders must define for themselves what success means. A start-up can end in many ways. They could become successful, profitable, and publicly listed brands like Infosys and Airtel on one hand, while on the other Zerodha and Zoho are proof that one can build profitable businesses without external funds. A close friend, Manjunath, invested years and lots of personal money, convinced that despite headwinds his email marketing service (Kenscio.com) can be a sustainable model. Today, it’s a delight to see his company growing profitably.
Some start-ups raise billions of dollars and go different ways. A few go public while still making losses, hoping public funds will give them the runway to turn profitable. Amazon is an example of this and, in recent years, Uber is playing this high-stakes game. Closer home, Zomato and Paytm have listed loss-making ventures, and now the public is eagerly waiting for profits.
Start-ups like Flipkart raised billions of dollars and got acquired by a large corporation, which is a good way to exit, though the business may continue to make losses.
Byju’s is a strange case of how the world’s most valuable ed-tech until a few years ago can quickly collapse due to poor governance.
Most start-ups go down the romantic route. They heroically struggle for years, unable to get the product-market fit, fight hard-selling to customers, keep pitching unsuccessfully to investors, and stoically shut down and go home or move to the next adventure. These unknown founders must be praised for building the foundation of the start-up ecosystem.
I experienced varied endings with my start-ups. Fabmall was acquired by Aditya Birla Retail and rebranded as More; Again Drinks faced funding challenges; and Indiaplaza went so belly-up, I ended up writing a best-seller about it.
Being an entrepreneur in India is hard. Most are first-generation entrepreneurs with no family backing or capital. They throw off the comfort of a salaried job and set sail into the unknown against strong headwinds. Think about it. Most middle managers with some experience want to do something on their own but only a few take the plunge. I define this daring act of starting up itself as a huge success. How the start-up ends doesn’t matter.
This is my mantra: 99% of start-ups may fail. 100% of entrepreneurs succeed.
(The writer is a serial entrepreneur and best-selling author of the book ‘Failing to Succeed’; he tweets @vaitheek)