Ideas are easy. It’s the execution that separates the sheep from the goat. However, good an idea may be, it won’t be adopted automatically. Ideas need to be driven into practice by patience. The booming start-up industry is a great example.
For every ten start-ups launched, nine fail. The primary reason is the lack of effective marketing. It is essential to embed your presence in culture. marketing needs to be pervasive and precise to generate a market where there was none. Otherwise, just like any passing trend, your business will lose demand and eventually shut doors. Here is a list of ten promising start-ups who bit the dust due to poor marketing-
This was a dating app that used location intelligence to link up those who were already connected online. It wanted to tie up with consumer internet businesses to provide dating options like places to eat and vacations. Being a novelty, it quickly went viral but that didn’t translate into stickiness. Big players like Tinder took over the market soon.
Golden child, part of the first batch of the Google Launchpad accelerator program, FranklyMe shut shop last year. FranklyMe began as a site for connecting celebs with fans, then pivoted to video blogging. It had tools to help users create and post videos. The video mode is a budding platform but an independent app failed to hold popularity due to complexity in operation. It’s a promising idea just well ahead of its time. The people haven’t adapted to the medium just yet.
This mobile auto-hailing app dreamed to become a poor man’s Ola. Unfortunately, the ground reality is different. Adoption has been slow among drivers even in tech hubs. Further, the prices are really close to the one offered by cabs, making the sweaty auto ride not worth the hassle.
Research firm Technopak says logistics and delivery account for 30 percent of the costs of e-commerce companies in India. Thus resulting in a plethora of investment in the direction. Truckmandi, was an on-demand truck booking app. Transporters could bid for customer loads for a fee – two percent of the carrying charge. It sounded good on paper but failed in the field. The delivery business isn’t as simple as it seems, it is very need-specific and works with a personal touch. Start-ups have failed to digitize it so far.
Fashion renting is an established market in the west. A couple of investors have tried to capture the market in India as well, Flyrobe being one of them. However, Indians are not used to borrowing clothes, even to flaunt high fashion. Further, the general public had concerns regarding hygiene. The demand didn’t shape up as expected and it is soon to close shop. There is a need to prep the market for such ideas.
The fashion e-commerce industry is surviving purely on marketing. Everyone is offering similar products, the game being who sells better. Fashionara only managed to attract customers by offering heavy discounts, which obviously wasn’t good for the financial stability of the enterprise. The fashion retail market is heavily crowded with no differentitation, if you enter, enter with a solid marketing plan.
TinyOwl raised US$15 million in February last year, followed by a bridge round of US$7.4 million in October to give it an extended runway. But all the funding could not solve the core problems of meeting delivery costs. The demand took successive hits due to unreliable food quality. In an already stooping food market, distrust among customers spelt doom. The company had lay offs and an eventual merger with a logistics company.
PepperTap has the dubious distinction of being the biggest failure of 2016. The Gurgaon-based startup had raised over US$50 million, including a US$36 million series B round led by e-commerce player Snapdeal in September last year. And yet, less than a year later, it shut down. It failed to cover ground and at the current rate profitability looked at least three years away. They were working on negative margins per delivery yet failed to add customers. It is difficult to compete with local vendor pricing and still cover costs.
Edtech is another domain in India which puts investors in a dilemma; in a country desperately in need of an educational revolution, start-ups fail to work. The traditional methods still remain first preference. iProf, one of the earliest test prep startups in a country where college entrance exams are do-or-die affairs, had to shut shop. On the online platform, the consumer is still used to free stuff and pirated material, making it difficult for ed-tech to make a niche.
Another shocking member to the list of failures is the consumer internet search platform, AskMe which shut down in August. A variety of reasons, from weak technology to aggressive acquisitions, are responsible for the online retailer’s failure. The concept was to build an alternate search option, but old habits die hard and to replace conventional search engines isn’t as easy as it seems.
All budding entrepreneurs should take note that an idea backed by seamless funding isn’t enough. You need to sell the idea, sell it convincingly, once-twice, repeatedly. An idea in your head isn’t worth a dime. There is a need to spread it among the masses in order to profit from it. Good marketing is where you generate demand without a need for it.