This is another management strategy blog article, I’m not sure how many of you are going to like this but trust me this will be worth reading. The research about corporate firms, laws and startup ethics fascinates me after I began experiencing some weird things around my working environment.

This blog will list some of the failed startups of last year and reasons behind them and how it could have been done better to lift its position.

Reason no:1 YES MAN in companies :

 This is something that I blogged previously, accepting the truth state of where we stand and giving the transparency of how well things should be. If you are facing bad times, and some one asks you how are you? , don’t hide the truth say that you are bad to them. Let them know the truth, being honest is a gift. Not many people own it.

If your company is struggling financially you should gather your employees and give them the explanation of what’s happening, don’t give them a good hope saying that the company is going good and nothing is bad, we are not at recession (well everyone knows that US market is facing recession now). Be bold to accept the truth.

“Feminism is proportional to fertility, then male chauvinism is proportional to honesty”

Nassim Nicholas Taleb wrote a wonderful master piece called Fooled by Randomness the book portrays completely about how yes saying people to the management are the one’s who spoil it. I happen to read some of the synopsis in the book, it was really fascinating and I like to recommend this book to all non-technical managers and delivery heads to read about it.

The book says how decision-makers get misled because failures are masked. If you have a failure say to your employees that you have a failure people at 40 years of age with two child in hands and home loans may find another company to work along and search for next job. Don’t hide it and fire them in a fine full-moon day.
  
Example : This strategy led to  the failure of the famous food startup company called DAZO, this was a food app startup which was initially named TabCibo, where Cibo in italic means meals, (who cares…) this financial year is the tough run for zomato and tinyowl too, still they are having revenue in their hands so they live. But Dazo believed that they are doing good and failed. Too bad because of people saying yes yes to management and to the employee, stating that they are being management friendly.

Example 2 : One more food startup company called SpoonJoy I’m concentrating on indian startups, Spoonjoy is acquired by Grofers now, just because of the bad management strategy.

As urban India sees a mushrooming of nuclear, double-income families, as well as a large influx of young singles with busy work schedules, there’s clearly a big opportunity for food ecommerce. But this has led to a rush to fund food startups from investors with a “fear of missing out” syndrome. Not enough attention has gone into the cash burn and quality problems on the ground. Now, many of the startups are finding it hard to raise later stage funding and floundering.

Reason no :2 Not right team / Management

I know a guy, he is a brilliant team leader / solution architect , who insisted in developing a generalized monitoring solution for a healthcare interoperability tool, which makes the work easier.

People like him were driven not by salary, but by passion. Their eagerness to learn things and produce results. This passion cannot be full filled if they are not given liberty to work. Building more process, get things complicated and results in dragging down the liberty of the employee.

Passion = Profession. Process affects passion. Process = passion. So, A=B=C, hence A=C. Process=Profession. Process directly affects Profession. Most of the good resources are under-utilized, talents were degraded, and were said to do odd jobs, just because of  process existing in that Environment.

When I create an Organization I will make sure it follows Process only on Business and technical perspective not for Innovative  Ideas or Development of Business.

Reason no:3 Ignoring Competition :

Whatever we do, has a solution already everyone should understand it, IT is vastly developing when we think of one product some one is implementing on the other side of the world, what we should have is someone who can analyse the trend better. trend is nothing but People need. We need to understand people’s need better.

Ibibo has Red bus as one of the big competition, recently I checked the crunchbase website that says IBIBO brought RedBus. WOW. eat your competitors.

Startups are often advised to focus on their own thing instead of getting distracted by the competition. But this can be taken too far, apparently. Ignoring the competition was a recipe for disaster in 19 percent of startup failures. One of these, Wesabe, recounted how they were convinced they could solve a pain-point in the financial lives of their users by providing more privacy and making them less reliant on a single provider. But it had a fatal flaw. “It was far easier to have a good experience on Mint (Wesabe’s competitor), and that good experience came far more quickly.”

Reason no:4 A flaw in the Business Model :

A startup can get going and do well before floundering when the time comes to scale up. That’s because its business model works only up to a certain size, and is not so good when it comes to making money on a larger scale. A case in point is Tutorspree, which gained traction, and even got selected for incubation by Y Combinator, but wasn’t able to capitalize on it. In the end, it became too focused on SEO.

“We were single channel dependent, and that channel shifted on us suddenly,” explains Tutorspree.

Reason no:5 Too Early to Market :

The opposite of the previous point is also true – that sometimes a startup can be in such a hurry not to miss the window of opportunity that it can take a product too early into the market. Or sometimes the idea or the tech is ahead of its time, as in the case of Calxeda: “We moved faster than our customers could move. We moved when the operating-system environment was still being fleshed out – we were too early.”

There are many other reasons for startups failing, but the 5 that came up most often provide useful signposts for everyone involved with the startup ecosystem. What’s to be appreciated here is the willingness of those who failed to share their experiences, so that the ones who follow in their steps can do better.