Building Amrutam [D2C, Ayurveda] Forbes30U30, Shark Tank S2, BW 40U40, Incubated at IIM Bangalore, and Learning to be a Better Leader.
Five of my close friends have been laid off from five different Indian startups over the past few months. They're not alone. In 2023, leading Indian startups have let go of 20,000 employees. While I don’t know the exact reasons for all these layoffs, my friends were let go because their companies couldn’t secure funding, failed to scale, or mismanaged investor funds. In fact, over 35,000 Indian startups that raised more than $5 million USD have shut down so far. What worries me is this isn’t just about companies closing; it means people losing their jobs. It’s a harsh reality, driven by unsustainable business models and the urge to scale too quickly. The dream of rapid scaling often pushes startups to chase higher valuations rather than focus on sustainable growth. They aim for fast growth and high revenue, even if it compromises the integrity of their business model. Sadly, as the statistics show, this strategy doesn’t always work. Many believe that the fastest way to success is to convince others of their potential wealth. If they succeed, the startup team becomes instant millionaires or billionaires. But this perception is just an illusion. Focusing solely on high valuations is a dangerous path. It might lead to more dilution in the long run and could even result in your company’s failure. I've always believed in a different approach to scaling a business. For me, loyal customers are the most valuable investors. They return for more and refer us to others, creating a strong foundation for growth. When it comes to scaling, building a sustainable business is essential. Raise a smaller amount at a lower valuation and focus on de-risking the business before seeking additional funding. With patience and a consistent pattern of under-promising and over-delivering, you will have an easier time raising money, a more valuable company, and an equal or greater percentage ownership of it. Reasonable early valuations are not just a bargain for investors; they are also a bargain for entrepreneurs. Let's aim to build businesses that last, with secure employment opportunities with integrity and the trust of our customers.
Ram S Shukla
4mo
Thanks for sharing detial about no of startup raised fund and shut down. Thanks for sharing tips how much to raise fund in which valuation. You have poured your expertise and experience I think people fail fast Because they think if they get money then will start growing that is totally wrong. First need to learn about business, managing team, building culture, perseverance and courage to fail multiple times and getting rejection Once learn then start raising fund. I can totally agree what you want to say
Debjit Banerjee
4mo
Wow, these statistics are truly eye-opening. It's so important for startups to focus on sustainable growth rather than just chasing high valuations. I couldn't agree more with the approach of building a strong foundation with loyal customers as the most valuable investors. I've actually had success implementing this strategy in my own business, and I would love to share more about it on my profile. Let's work together to build businesses that last and create secure employment opportunities for all. #sustainablegrowth #loyalcustomers #businessintegrity
Sumit Mishra
4mo
Focusing on high valuations may seem like a shortcut to success, but it often leads to dilution and potential failure in the long run. Building a business based on loyal customers and a strong foundation for growth is a more sustainable approach.
Nandagopal P
4mo
This is clearly taking a toll, not just on businesses but on the individuals who depend on them. Start small. Create a plan. Build a strong team. Sustainable business >>> chasing quick wins. Stuti 🙌
Soorya Parambath
4mo
I resonated with every single point. It's crucial to start small, develop a foolproof plan, generate revenue, and always secure funding. By taking these steps, we can build sustainable businesses.
Deepam Suneja
4mo
Most startups in India raise at a very high valuation, and after some years of operations the valuation falls down or they fail to generate enough revenues.
Mayank Singh ♾️
4mo
Every point here is right Stuti. Starting small but with a good team is super important.
Ashish Gupta
4mo
High valuations might sound great, but they often lead to dangerous dilution. Build your foundation first.
Wasim Peerji
4mo
Chasing high valuations is tempting, but sustainable growth wins in the end. Let's focus on building businesses with integrity and resilience. 💪 Stuti Ashok Gupta
Founder, Nirogam.com, Herbal Supplements Marketer and Formulation Consultant, D2C for 24 years. Ayurveda Activist, a.k.a "That Ayurveda Guy"
4moSuch companies aiming to scale and grow rapidly and surviving on securing funding, should sign up a PRE NUPTIAL with every team member they get onboard, otherwise, they are just shrugging off all responsibilities in an event of a shut down. New employees should demand a pre-nup. What say ?