Why do most start ups fail?

"Katrathu kai man azhavu; Kallathathu Ulagalvu", is a quote by Avvaiyar (an Indian poetess of the 3rd century BCE), which is exhibited in NASA. It closely translates to "What I have learnt is only a handful; What I still need to be aware spans this entire world".

P.S: I don't claim any authority in the field of business, in fact just the opposite: the more time I spend growing my business, the more I realize that I have a lot more to learn!

If you are expecting statistics, infographics, management theorems or advice borrowed from billionaires, you can skip reading the rest of this article. This article is part of a series of short articles and messages, written for an aspiring entrepreneur, who is looking to take his first steps in the complex business world.

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It is a very humbling experience, to be invited to share what I have learnt in my journey as an entrepreneur. I have been lucky to meet the right kind of people, at the right time, be planted at the right place, and lucky enough to have been given the right set of values by my parents, which includes being openminded towards learning and working hard with a never give up attitude. It is this "lucky combination" that usually brings on a large stage, addressing hundreds....sometimes thousands of enthusiastic people, usually entrepreneurs and aspiring entrepreneurs.

One question I am asked often these days is, "Why do most start ups fail?". While there are multiple studies that have been done in this regard, and it might take multiple books to answer this one question, this article is a common sensical effort to answer this question for an aspiring entrepreneur (something that I would have easily understood about 15 years back, when I was getting exposed to entrepreneurship).

Most start-ups are founded by first generation entrepreneurs. Even if they do come from a “business family", the family business experience does not prepare them enough for the dynamics of today's business world.

Let me try and give you an analogy about starting your new company. Imagine this. The new entrepreneur knows where he wants to go (business goal, success, revenues, market share, etc).

But unfortunately, he is in a completely new country, without any map (or google maps), there are no sign boards, no public transport systems, where the people do not speak any language that he is familiar with; the people are quite suspicious of visitors and probably not very friendly. The place is even more confusing bcoz the weather is totally unpredictable, there are many days at a stretch that you don't get to see the sun or moon to be able to figure out directions.

The new entrepreneur is fully loaded with optimism, knows how to ride his vehicle (his business, new idea or technology) very well, usually better than anyone else, and is well aware that he will be rewarded handsomely when he reaches his designation.

Now, can you imagine how ill-equipped the entrepreneur is, when it comes to reaching his destination? He goes around with a lot of enthusiasm in this new place, which is changing almost every single day. After a few days or few months, he is gettin a little weary, unsure and is worried whether the fuel (finances) will last till he reaches the final destination.

Slowly, he starts coming across other visitors, who are also searching the same destination. Some of them have been searching for much longer than he has been. As time goes by, he is now more doubtful whether all the stories he read in the newspaper and internet and saw on TV about people who reached the final destination is true. Some entrepreneurs feel they've gotten a lucky break when they find someone (investors) who is ready to give him money for fuel. Unfortunately, in most cases, these investors start telling the entrepreneur what changes he should do to his vehicle to reach the destination.... for most of them have not reached the destination themselves.

In this entire picture, there are a few guides (mentors, coaches...and very few investors) as well. They don't support the entrepreneur with money for the fuel, but they seem to understand the journey fairly well. They don't join the entrepreneur on his journey, but are willing to guide him at every turn that he feels stuck. And most of these guides give suggestions only when the entrepreneurs reach out to them. So, it all depends on the entrepreneur to call these guides as often as required for directions. It all depends on how well the entrepreneur is able to implement the recommendations determines how easy or quick the journey to the final destination is.

It doesn't take a lot of rocket-science-level-intelligence to understand this. The biggest success stories right from Edison, Ford and Carnegie to the present day Gates, Bezos and Zuckerberg have had mentors. Even in sports, mega stars like Federer, Phelps, Bolt and Kohli know that they need a coach!

Given the above is a major factor, here are the key areas where most entrepreneurs fail to pay enough attention as they get started on their entrepreneurial journey:

1. Sustainability
2. Scalability
3. Predictability
4. Profitability

While none of the above mentioned is a coveted secret or rocket-science, most entrepreneurs assume that they will take care of these factors when their business reaches a particular level. Unfortunately, unless one has all these factors plugged into their business plan right from the beginning, the business is likely to hit the road blocks down the road. We will take a more detailed view on these four factors in another article following shortly.

And of course, all the above applies, assuming you have a clear purpose defined why you want to be an entrepreneur.

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A quick summary of my journey till now:

I come from a simple South Indian middle class family. My dad was a Tamil teacher in a government school and mom was a typical village lady. Both of them gave me the foundational values of hard work and an optimistic outlook towards life. When I grew up, I was always told that the sign of true success is how many people we are able to help. I thank God for placing me in a position, where I am able to extend a helping hand to people like me, starting from a humble background but determined to win in life.

When I started my entrepreneurial journey, i had no clue about how to get started, leave alone succeed!

Our journey started from absolute scratch, with no money in my pocket, learning from other successful people all along the way, making mistakes and I continue to learn every single day.

Today, our business has spread across multiple countries, has been completely debt free for over a decade and been profitable year on year for many years.

My journey gives me the belief that anyone who aspires to be an entrepreneur can be successful, provided they are willing to learn the rules of this exciting game. More difficult than learning, for most individuals, is the unlearning they have to do; unlearning all the 'knowledge' which they have acquired from the society, academia and their work experience.

It is my time to pay it forward, all that i have received from the many mentors and coaches i have had an opportunity to learn from, to anyone who is an aspiring entrepreneur.

WARNING: I demand a high coaching fee: YOUR PERSONAL COMMITMENT TO LEARN and TO PAY FORWARD when you have a success story to talk about :)

Disclaimer: All views expressed in this article are the author's personal views and have been derived from his personal experience. There is no guarantee that the views/recommendations will work for everyone or at all times. The author is not liable for any losses, in whatever form, arising out of implementing any recommendations from these articles.