I have spent significant amount of time around founders attending startup events, networking sessions, founder meetups, demo days and countless informal conversations around building businesses. I’ve met people building in technology, service, consumer brands, marketplaces and many more.

Out of all the founders I’ve met, I have come to a belief that 1 out of 100 founders [now this is just an approximation to show you the reality of people actually building it] seem to be building businesses that are genuinely growing, generating revenue or creating meaningful value for customers.

I am not saying this because people are not capable [actually I believe everyone is] yet not every founder makes it. I have come to an understanding that the reason most startups fail is often because of the founder themselves and very rarely because of some external factors.

I have shared an example of one of my own businesses that failed miserably despite of generating enough revenue and being profitable at the end. But first let me share some of my observations on why startups fail in India.

I know this may sound harsh, but I do believe that not everyone is suited to become a founder or an entrepreneur. This is not a criticism but just as not everyone is cut out to become a doctor or a lawyer or an athlete, not everyone is naturally suited to building a business.

In my 25 years of being an entrepreneur, I’ve become aware of the fact that entrepreneurship demands a unique combination of traits. It required persistence when progress is slow. It requires resilience when things go wrong. It requires the ability to make decisions based on your gut and feeling when you don’t have complete information. It requires taking responsibility when there is nobody to blame. And lastly, it requires the willingness to continue to move forward despite uncertainty.

Many people are attracted to the idea of entrepreneurship because they like the freedom associated with it. They like the idea of being their own boss [frankly, I love it!]; they like the idea of creating wealth [love it even more!]; and especially when the startup culture is becoming so popular they like being called a founder.

However, what they often underestimate is the emotional and mental pressure that comes with building something from scratch and trust me, it is crazy.

One of the characteristics I consistently notice among successful founders is curiosity. Curiosity to know. Curiosity to learn more. Curiosity towards what can they do more. Curiosity to figure out how, what, when and why.

They ask questions constantly; they want to understand why customers behave in certain ways; they want to understand why their competitors are succeeding; they want to understand why a process works or does not work and they’re rarely satisfied with surface-level answers.

On the other hand, many founders operate almost entirely on assumptions. They assume customers want a particular feature; they assume people will pay for their product; they assume demand exists; and they also assume growth will happen once they launch.

The problem with this is that there is no evidence of anything what so ever and anything that is built on assumption is bound to fail eventually.

Another difference that I’ve seen between successful founders and struggling founders is clarity. Founders who are genuinely building it are extremely clear with whatever they’re building while on the other hand, I’ve met founders who work 12-14 hour a day making zero to very little progress.

These founders cannot clearly explain the most basic questions such as what problem they are solving? Who their ideal customer is? Why customers should choose them? how they will make money? and what success looks like to them? As a result, they spend their time moving in multiple directions instead of building something concrete.

This is why a simple startup plan that creates clarity can be incredibly valuable if you want to build a successful startup.

One of the biggest mistakes founders make is raising money simply because they think startups should raise money. however, investors expect founders to know; how much capital they need? Why they need it? How long will it last? What milestone it will achieve?

They end up spending months and something years refining the concept that eventually, they become so invested in the idea that they stop questioning whether the underlying problem even exists.

Customers do not care how much effort you have put into an idea; they care whether it solves a problem they are willing to pay to solve it.

The strong founders I know are obsessed with understand problems rather than defending solutions. They know that there are multiple ways to solve a problem. Therefore, products and services both can change and sometimes even business models.

The startup ideas are always rooted in real problems generally have a higher change of succeeding than ideas inspired by trends, hype or temporary excitement.

Founders hate selling and I don’t understand why. If you believe that you’ve build a great product or service that you’ve spend months or years building is great, why can’t you sell.

Actually, I know why. In India, sales is not a skill that is taught. We’ve been taught to become doctors, engineers, lawyers or any other profession that we can get a good job in but sales. Literally, the most amount of money you can make is by doing sales and you don’t see a lot of founders being able to do so because it makes them uncomfortable.

However, when it comes to building a startup – sales is what’s going to keep it alive. Without sales a startup is not generating any revenue and without revenue there are no profits. So, you tell me how is the business going to survive?

One of the very common misconceptions about startups I’ve heard is that the founders who have become successful simply had better ideas. I can guarantee you that it’s not true.

If you speak to founders have found success, they will tell you that they’re far from their original concept or idea that they had thought of. At least most of them will tell you this. This is because when you first get your hands dirty by entering the market, you understand that how fast everything changes including the competition, technology as well as the customer expectations.

I’ve seen founders who survive are usually the ones who adapt and founders to continue pursuing the same idea had too much time and emotion invested into them without seeing any actual fruits.

One lesson I learnt long before I became involved with the startups came from one of my own business experiences. A friend and I had started a confectionery business back in 2014 where we had sort of franchised a local baker’s brand.

The business was doing well; we were making profits and people had start to recognise us because of the quality of the cakes the baker baked. However, almost a year, later when I repeated suggested that we formalise the arrangement and put a proper agreement in place, I felt uncomfortable relying on such important relationship with any formal commitment.

There was too much back and forth and after not being able to put a proper document in place, I left the place of business. A few months later, I found out that the baker out of nowhere decided that she wasn’t going to make the cakes for the franchise and it was shutdown.

The point I’m trying to make here is that the warning signs are always there, it’s just that a founder has to become aware and act on it as quickly as possible as to survive the business and the investments. Because when a founder chooses not to, the startup fails.

A few things when startup failures are discussed in India, funding inevitably becomes part of the conversation. Yes, funding is an important and an integral part of a startup ecosystem, yet I believe, it is often a symptom and not the root cause.

While money can accelerate growth, create opportunities and buy more time, it cannot fix a business that is fundamentally broken. Sometimes, I am surprised to see founders who spend more time preparing investor decks than actually speaking to customers and selling their products or services.

A startup that is failing to raise funds often has deeper issues which I’ve mentioned earlier in this blog, which is why revenue is often a better validation than raising funds.

After spending the last couple of year observing founders and startups, I have come to a simple conclusion. Most startups do not fail because of one catastrophic mistake. I mean they can but not as often as you’d think. They fail because of a series of small decisions along with ignoring feedback, no willingness to learn, not thinking objectively and avoiding sales.