11 failed startups in India this year and what you can learn from them

Learn from your mistakes. Even better, learn from others’ mistakes. This is an oft-repeated piece of advice to startups, but it’s easier said than done. We don’t easily accept our mistakes to be able to learn from them. Nor do we find it easy to talk about them for others’ benefit.

This is especially true in a society like India, where failure isn’t worn proudly like a badge as it is in a more mature startup ecosystem like that of Silicon Valley. Last year, Failcon, a San Francisco origin conference aimed at sharing experiences of failures, got a lukewarm reception in India.

Perceptions make all the difference. If a failed founder is seen as being the stronger and wiser for it, he would happily talk about it. But if failure is seen as a sign of weakness, then it prompts reticence.

2015 is a watershed year for India, with over US$8 billion of venture capital funding expected before the year’s out – 50 percent higher than last year. This rush to invest in the newest El Dorado of tech startups has created its fair share of irrational exuberance, as half-baked business models and a plethora of copycats have got VC backing with scant attention to ground realities.

Nassim Nicholas Taleb wrote in Fooled by Randomness about how decision-makers get misled because failures are masked. This is compounded by startup founders being surrounded by yes-men who do not give honest feedback for fear of being seen as negative influences. The media contributes to this distorted reality by constantly celebrating successes and ignoring failures.

But, as the following 11 examples illustrate, there’s as much to be learned from a failure as from a success. However, beware of being “fooled by randomness.” As Taleb cautions us, there are several factors or even plain luck that we often don’t take into account when we attribute reasons for a success or failure.

See: How likely is your startup to fail within a year? Here’s the bitter pill

Dazo

Photo Credit: Ewan Munro

Golden investors and bona fide founder certification still couldn’t save this one. The Google India MD, the Amazon India country manager, the FreeCharge CEO, and the founders of CommonFloor, TaxiForSure, and Yo China were all investors in this food startup. Its founder, Shashank Kumar Singhal, was the mobile product head for India’s first bus ticketing site RedBus, who had qualified from the prestigious Indian School of Business. His co-founder Monica Rastogi was equally well qualified. And yet, it had to shut down in October within a year of launching.

The startup began as an internet kitchen with its own chefs and reliable partners serving a few localities in Bangalore. But soon the pressure to scale up made it pivot into an aggregator of restaurants as it focused on the tech at the cusp of food and logistics. This made it dependent, however, on many restaurant partners whose food quality and delivery efficiency were beyond its control. The curation of content it promised at the outset began to take a beating. It changed its name from TapCibo (because many new consumers didn’t get “cibo” is Italian for food), but neither the new name Dazo nor the cool tech it had developed could prevent its slide.

A number of other food startups like TinyOwl and Zomato have run into problems this year, but are trying to ride it out with a longer runway they have in funding.

Spoonjoy, Langhar, OrderSnack

DoneByNone

Jewelskart, Bagskart, Watchkart

TalentPad

Townrush

Lumos