India is Not Only Accepting Failures But Celebrating Them Too!
The startup ecosystem in India is gradually beginning to not only accept failures but also celebrate them...Read How?
There are umpteen stories of success through failures. JK Rowling’s Harry Potter was rejected by a dozen publishers before it got published and became a bestseller. At age 22, Walt Disney was fired from a Missouri newspaper for not being creative enough. One of his early ventures called Laugh-o-gram Studios went bankrupt.
Similarly, Steve Jobs, the legendary icon of Apple, now considered the father of innovation, dropped out of Oregon’s Reed College after one semester and also quit one of his first jobs to backpack around India and take psychedelic drugs, according to CNN. He later said that these experiences helped him create an iconic brand and the largest technology company in the world. Ace basketball player Michael Jordan didn’t make it to his high school basketball team! In Jordan’s own words, “I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occasions, I have been entrusted to take the game winning shot, and I missed. I have failed over and over and over again in my life. And that is why I succeed.”
All these stories tell us that failure is more often than not just a stepping stone and that there can be no successes without failures. Therefore, it’s important to celebrate failures in the startup ecosystem, more so, in a country like India where starting up itself is often looked upon with cynicism by the traditional society. Startup founders often have had to go against the wishes of their parents, relatives and in-laws to quit their jobs and decide on starting something on their own. In such a scenario, how does one stay motivated when the chances of failure are actually very high? As per available statistics, 90-95 per cent of startups fail initially and most of them come up with successful startups only in their third or fourth attempts.
The Indian startup scene, in fact, is filled with stories of failures and shutdowns. As per estimates, more than 40 per cent of the startups set up in the last two years have already shut shop. Not surprisingly, online food companies topped the chart. Dazo, Spoonjoy, Langhar, Eatlo, and OrderSnack are just some of the names in this space that have decided to shut operations in the last two years. In the online fashion segment, Bengaluru-based fashion e-tailer Fashionara and Gurgaon-based women-only fashion marketplace DoneByNone were among the casualties. The list goes on.
The Silver Lining
However, the good news is, companies today are increasingly realising the importance of failing. For instance, Ambarish Gupta, founder & chief executive of Knowlarity, a cloud telephony company, has hired several ‘failed’ entrepreneurs to lead his business now as he believes that entrepreneurship gives a person unparalleled confidence and experience that is not possible to acquire in one’s comfort zone.
An IIT Kanpur graduate, Gupta started his first venture Inventica in 2003 which was an online platform for apartment searching, similar to the likes of 99acres.com. “But, we did it much earlier,” says Gupta. However, the timing wasn’t right, he ran out of money and had to shut shop, he says. But what Gupta gained out of it was tremendous experience and knowledge which would not have been possible without venturing out on his own. His advice to young entrepreneurs today is not to get carried away by the limelight but to do what makes them happy.
Microsoft Accelerator, a global initiative empowering entrepreneurs around the world on their journey to build great companies, is also thinking afresh today. Bala Girisaballa, CEO-in-Residence, Microsoft Accelerator, believes the definition of failure has changed today. “It is seen more as shades of success,” he says. “The market is much more liquid and there are enough opportunities for the entrepreneur and his team to get acqui-hired.”
Girisaballa says Microsoft Accelerator not only helps in the acceleration of startups to success but also to failure such that minimum damage is done. It mentors entrepreneurs to look at their problem objectively so that in four months they know if they are on the path to success or a shutdown. In the past four years, out of about 100 companies that Microsoft Accelerators has worked with, about 8-9 of them have shut down and an equal number of them have found successful exits. About 15-20 of them have changed strategies and paths, and in a way, Microsoft Accelerator has prevented them from failing.
Though in the last five years, India has come a long way in terms of the social perception towards failure, it’s still far behind Silicon Valley where entrepreneurs can actually flaunt failure as a badge of honour. A lot of this confidence comes from the investor community which is willing to re-invest in them or see them as more able after their ‘failed’ experience.
Investors are one of the most critical components in most organised startups in the country today and they have a huge role to play in ensuring failures are not detested. Indian Angel Network (IAN), world’s largest network of angel investors, believes that accepting failure is part of the entrepreneurial journey and failure is gradually being accepted in India. “Some rejections and failures only help keep entrepreneurs on their toes and help them stay ahead of the curve. IAN not only brings money, but also provides mentoring and helps foster entrepreneurship,” says Padmaja Ruparel, president, IAN.
In fact, IAN investors have been instrumental in turning ‘failed’ companies around. Without naming it, Ruparel talks about a company which had built an extremely innovative product catering to a large market and with a healthy order book. But the company had a tough time converting the orders to delivery and was almost on the verge of closing business. “IAN investors worked hard with the promoter team to work through each issue, motivated the team, revived the customers and ensured high quality delivery. Soon the company’s traction attracted investors and it raised the next round and they are now on track to build the business further,” she says.
At a time when several venture capitalists are talking about funding crunch, angels are continuing to invest and foster the entrepreneurship culture in the country. So far this year, IAN has invested in close to 22 startups as compared to 18 in 2015. Recent reports suggest that deal activity by angel groups in India has grown significantly in 2016, amounting to Rs 113.7 crore across 69 deals, as compared to Rs 70.3 crore across 47 companies last year.
“It is our mentoring and handholding along with the money that has helped build a high-quality portfolio of companies and only 10 per cent of them have been written off,” says Ruparel.
Entrepreneurship is the most difficult career path that anyone can take and therefore only 8.5 per cent of India’s population are entrepreneurs. “It is a lonely journey with lots of 90-degree turns,” says Ruparel. But every low provides a new high and only after falling down can you get up. The fear of failing has kept many entrepreneurs away thus far but times are changing. Failure is no longer a taboo and in fact, it’s important to fail to realise the sweet smell of success. Let’ celebrate failures.
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