Myth of Raising Money equals Success


Its scaring nowadays to read the shut down of companies which are earlier earmarked as the most successful startups. Example Quirky today. Actually speaking their products are really good. But what went wrong?

The bubble burst is yet to come. Before that we are witnessing many companies that are getting shutting down. First of all we need to understand that all startups are not successfully running forever. Even the Venture Capitalists are not expecting all their ventures to run successfully. They are quiet happy if they make money from one venture out of every 10 they make.

Groupon has shut his operations in 7 countries and laid off 1100 employees. Quirk has filed bankruptcy. We are getting to know these because they are becoming NEWS in the media. But there are 100s of startups that are getting shut down even before they takeoff. No one is getting to know that.

What will be the impact if we get to know about all these failure startups.

We always see at the successful startups and draw a line. But we never even get to know the failed startups at all. Couple of years back I met a CEO of a startup in USA who was manufacturing stands for holding books and laptops and tablets. The speciality of this stand is that we can adjust it to suit at all positions even when we are lying down are slouching at the couch so on and so forth.

We had dinner together and he was very positive about it. I had a question in my mind. This is nothing but our table-mate which is already popular in USA that time. Last year I saw him working as a Technical Lead in another company. When i enquired I came to know that his business didn’t takeoff well and so he shut it down. His product would have been a successful one if he had thought of tweaking the same so that people can carry it along with them wherever they travel. Just to use at one location we already have table-mate and their many replicas. This is Good Idea But into Competitive Market.

In 2012 I met another CEO who was trying to raise money for his new concept of Internet for Blind people too. The concept is still a most innovative one and I have even experimented his POC which is designed for Patients to access their records at a particular Hospital and make new appointments or to access their pathology report or for anything related to hospital management through net. His aim was to expand it to all possible verticals. But 3 years passed and it didn’t takeoff well. This is Business Model Problem. He doesn’t  have an internal competent team to build and iterate the product.

We can pass negative comments on every concepts we get to know. But the CEOs are able to see the positive aspects more than the negative aspects. I wish all these CEOs have a R&D team which gives every findings in a very candid way. This is evident because of Resisting Deep Thinking and Analysis

Last year I met another friend of mine with the concepts of brining one perishable product door to door. Just one product and then based on the success he planned to bring to many more in the same way. He can sell that product only for a quarter in a year and he doesn’t have a plan to run the business for next three quarters. He did a good move. Since he was asked about that Business Model for the entire year, he stopped it at once and saved the money and time. The best part is he DIDNT IGNORE THE FEEDBACKS.

9 out of 10 startups fail. This is a hard and bleak truth. The one who WIN becomes the yardstick for everyone to get into new startups. This should not be the real model. They should be the motivation. But experience of those who failed should be the yardsticks of what not to do in business.

Inspite taking off, 1 in 10 business crash land. This is nothing but Management Problem of not knowing how to scale up or not knowing how to recover with small hiccups in the initial period.

The top most reason for any well took off business to crash land is their abnormal rapid growth in the first 3 – 5 years where they fail to meet the cash requirement with their growth rate.

The one who succeed has done different than what the other 90% people have done.

Well start is half done. But don’t forget that we have another half to be done correctly to call it a SUCCESSFUL Venture. Else every business will crash-land for sure.

This proves that getting funded alone will not assure your success in Business.