Why startups fail in India due to lack of digital marketing
  • 02 May 2019
  • Admin

Why startups fail in India due to lack of digital marketing

 Since past decades, India has been providing for a nurturing ground to various backgrounds to startups but they are merely a clone of Western Ideas. Although, due to lack of technology the country has led to investors restricting funding which results from slow decline in entrepreneurship. The blog is with regards to the failure of Indian Startups due to lack of digital marketing practices. The reason for writing about this topic is the vast amount of students are tending to open their startups; the number of entrepreneurial business is increasing at an exponential rate and will be an incessant trend.


What startups are?

Before finding out the reason for the failure of startups, let us discuss what is a startup business. Basically, a startup is interpreted as a new business venture in a hi-tech area. This cannot be the exact definition of startups because most of the startups are founded by students direct after graduation. Hence, we can say that a startup is a young company which is just simply at the beginning stage. It has been analyzing that startups are initially managed and financed by a handful of an individual who is known as their founders. Furthermore, startups are always started with a unique idea or thought that aims are to deliver something better or innovative to society. In other words, these companies offer such products or services which aren’t have been offered in the market. However, the sad part of India’s startup is most of the entrepreneurs sacrifice their career, personal life, earning and even though professional aspirations in order to create something innovative; there is an irresistible majority of failure of these cases. 

Startups Failure Rate in India

A report of IBM originated that 90% of Indian Startups were failed cause of several reasons in the last five years. Our nation is struggling to become one of the largest startup-hub over the world but the results are heading towards unemployment cause more and more startup businesses are intending to shut down. There is a list of some Indian startups which has failed, such as –


  • BabyBerry
  • MrNeeds,
  • Tazzo Technologies,
  • Wydr, Monkeybox,
  • Ofo,
  • Cardback,
  • Eatonomist


Since 2015, 1550 startups have closed down in India as the startup failure rate has reached 90%. Most of the times, entrepreneurs do not know how to tackle business activities as well as they aren’t sure about whether or not the idea will work out. Due to increasing of startup’s failure rate, India’s economy is also affecting because the issues raised related to – unemployment, poverty, low per capita income, etc. All this may also hinder the GDP rate of India in terms of slowing it down. Lack of innovativeness is the most common reason for enhancing startups’ failure rate; 77% capitalists admitted in a survey that Indian startups cannot survive long as there is an absence of unique business models and latest technologies.


Common Reasons for Startups’ failure 

Research is conducted on the reasons of startups failure in India; several reasons are identified, likewise - Not having the first mover advantage, Excessive splurge of money, lack of digital marketing strategy, lack of skilled workforce and replication of Western business models. Among them, ineffective digital marketing is one of the major reasons behind startups failure. As a startup, competing with large scale businesses is a difficult task however in this modern era digital marketing has created numerous growth opportunities for people to start their own business. But most of them get failed cause of improper implementation of digital marketing strategies.


“A startup without a digital marketing strategy is like driving without a steering wheel”.

Typically, digital marketing is a broader term which includes using an electronic device or the internet. Businesses leverage digital channels likewise – search engines, emails, social media, and their websites so as to connect with more and more customers. In this modern scenario, we all know the importance of the digital market, yet many entrepreneurs do not have a proper plan to take the edge of potential opportunities in this digital world. It has evaluated that an effective digital marketing strategy won’t only assist in making corrective business decisions but also renders a planned approach in order to make a brand successful.


Following is given certain issues due to which digital marketing strategy of businesses get failed


1. Low costs and budget:

Most of the companies take lightly to digital marketing strategy as they decide the low budget for it, but for startups, the great use of money is invested more and more in technology and marketing channels as they will pay higher returns in future perspectives. Owners think that they are saving money by less investing in digital marketing but it would be affected their future growth and success in a direct and indirect manner.


2. Expecting Overnight Success:

When you browse online journals, you would be got to know about exciting tactics related to startup marketing. The facts and figures are provided in those journals; likewise, you may encounter instant success, differ from real life solutions. Ultimately, the truth is there is no magic which provides overnight success to a start; an entrepreneur has to act beyond from his or her abilities in order to acquire sustainable growth and viability what they have been waiting for since long.


3. Higher dependence on social media channels:

For the sake of digital marketing, most of the entrepreneurs depend on social media platforms which results in poor execution of messages over the channels. It leads to poor brand interaction, brand messaging and brand engagement due to which startup’s market image also get affected and at last they are forced to shut down. Instead of this, it is wise to choose two specific social media platforms and make efforts to recognize target audiences.  But the problem is which platform is suitable for them to expand their business, for example – LinkedIn is full of professionals whereas Pinterest is jam-packed with women. The CEO of OYO Rooms stated in his interview that the chances of failure of startups could reduce as if entrepreneurs would have focused on their digital marketing strategy and put more innovation in their business.

4. Wrong Targeting:

The biggest mistakes that many startups frequently make are not doing enough research on the target market and audiences. Most of the time, entrepreneurs are unable to recognize the likes and dislikes of customers. It turns out into adverse results from the digital marketing strategy. Hence, first analyze perspective clients, where they can be founded and what would be their interests? Once you get to know all these aspects, then frame an effective digital marketing strategy that fits in the interest of customers.


5. Improper Track and Measure of Digital Marketing efforts:

Business owners are failed to track and measure digital marketing efforts due to which they cannot evaluate whether or not customers’ are accepting their products. It also indicates the unawareness about current market trends that also moves towards improper business decisions. Ignorance of measuring current performance also affects working areas that would be improved. Hence, it is essential to keep tailoring the digital marketing strategy.


Read More - How an Outdated Website can Hurt your business


6. Less utilization of tools and technology:

Another reason for the failure of startups is many owners aren’t able to make optimal utilization of best technology or system while executing their digital marketing campaigns. They usually make mistakes of not understanding the best use of tools and techniques that enables to save time and costs for accomplishing short-term goals. In this technology-driven world, it is necessary to develop a detailed plan for improving digital marketing strategy which requires high cost and skilled workforce. However, for startups, it is quite challenging to capitalize that much cost in technology and pay to high-skilled workers.


“Digital marketing without analytics is dead-end approach or throwing money down the drain”.

Hence, it would be better to say that before introducing a business into the market it is essential for companies to figure answer of certain questions – Was the digital marketing strategy is most appropriate for the company? Is they are obeying all the search engine guidelines for running digital marketing campaigns properly? No, not at all.  Local startup companies who have failed to implement digital marketing have incontestably missed out on many crucial opportunities that would have directed them to greater success in digital marketing. Furthermore, in order to improvise their digital marketing strategy they can apply some tactics, likewise – they need to develop blogs for the company which enables to drive the accurate message. It is also compulsory for founders to regularly look out the results which help in achieving positive results from the digital marketing strategy. Search Engine Optimization is required for sustainability as it makes your website mobile friendly and supports to attract more customers. Although, it is advised to entrepreneurs or young talent who will start their business in 2019 which will lead that websites are working fine. It should be remembered that never forget to decorate these with proper tags, descriptions or headlines to leave a mark in clients’ eyes.