REASONS BEHIND SUCCESS AND FAILURES OF STARTUPS IN

MYSORE CITY

PROJECTS 1

SUBMITTED IN PARTIAL FULFILMENT OF

POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM-2020)

COURSE CODE: MyC117

To the Academic Office

By

Student Name Student ID Specialization 1 Specialization 2

Raja Satheesh MYDM_2020_20 Marketing Operations

Addatrao

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 DECLARATION BY THE STUDENT

I, Raja Satheesh Addatrao, hereby solemnly declare that this project report is the output of research
work carried out with academic integrity carried out by us during the period 2018 through 2020
towards the partial fulfillment of Post Graduate Diploma in Management –PGDM

I declare that this project has not been submitted to any other academic institution for any award
of degree or diploma.

Student Name Student ID Signature

Raja Satheesh Addatrao MYDM_2020_20

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 CERTIFICATE

Certified that, Raja Satheesh Addatrao, Student of PGDM1, MYRA School of Business, Mysore,
have successfully completed the project titled “REASONS BEHIND SUCCESS AND
FAILURE OF START-UPS IN MYSORE CITY” in partial fulfillment of Post Graduate
Diploma in Management (PGDM). This project report is the output of research carried out by the
above student under my/our guidance and supervision during August 2018 to March 2019.

Faculty Advisor: - Dr. Prakash Nair

Signature: -

Date: -

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 ACKNOWLDGEMENT

I take this opportunity to express my gratitude to all those people, without whose support,
guidance, encouragement and understanding, this project would have not been completed.
I would also like to avail this opportunity to express my sincere thanks and profound gratitude to
my project guide Dr. Prakash Nair whose valuable knowledge and guidance helped me to
complete this project successfully.
I acknowledge the timely help extended by all my friends, colleagues, Academic Office and all
the others who have indirectly helped me complete my project.

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 MYRA SCHOOL OF BUSINESS
Mysore,
Karnataka 571130
March 2019

Table of Content

Chapter No. Report Section Page

No.

1 EXECUTIVE SUMMARY 6

2 INTRODUCTION 7-8

4 PROBLEM STATEMENT 8

5 PROJECT OBJECTIVES/RESEARCH 8
QUESTIONS
6 RESEARCH METHODOLOGY 9

7 ANALYSIS AND INTERPRETATION 9-13

8 CONCLUSION 13

9 LIMITATIONS OF STUDY 13

10 REFERENCES 14

11 INTERVIEW QUESTIONS 15

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 EXECUTIVE SUMMARY

This report summarizes the various reasons behind the failure and success of startups in Mysore
city. This study is focused on 16 entrepreneurs, which gave the information about their success
and failure, what are all the challenges they faced. The outcome of this study focuses on some
factors like financing, size of the target market, background, etc. which effect the business as a
whole. This study helps in understanding what are all the need to be kept in mind before starting a
business in Mysore and what necessary steps are to be taken to be a successful entrepreneur.
However, there are certain limitations that have been mentioned in the report.

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INTRODUCTION

India is the third largest start-up ecosystem but it is having very less successful start-ups. Startups
are key to economic development. Start-ups can have positive effects on employment and could
rejuvenate industries with disruptive technologies (Bower, 2007). The Global Entrepreneurship
Monitor (GEM) research data show that worldwide, an entrepreneur with high potential creates on
average as much as 3 times more jobs than an entrepreneur with average potential and as much as
15 times more jobs than an entrepreneur with low potential. Thus, there is only 4 % of
entrepreneurs who can be placed in the group of dynamic companies that have the potential to
grow on global markets (on average they reach at least 20 % annual income growth) and they truly
contribute to the economic development of the society, as they create as much as 38 % of all jobs.
In the society, there is only 6 % of entrepreneurs with average potential, amongst which we also
count those who achieve between 5 % and 20 % average annual income growth, and they create
28 % of all jobs. But the great majority of entrepreneurs have low potential (90 % of all) – on
average they achieve only up to 5 % average annual income growth and together create 34% of
jobs (shabangu, 2014). So, it is keeping in mind both economic development and employment
creation it is important for the start-ups to get succeed. So, finding reasons behind their success
and failures will be helpful for entrepreneurs. Unfortunately, the survival rate is the lower among
new ventures in general. Given the high failure rate of start-ups, in this way also it is important to
identify what factors lead to the success and failure of these ventures. Numerous studies focus on
success factors for new ventures, but this project even consists failure of new start-ups. According
to Nipun Mehrotra only 10% of start-ups in India were succeeding. A start-up is a new business
which is in starting stage to grow which is financed by an individual or group of people (mehrotra,
2017). A recent study by IBM found that 90% of Indian start-ups fail within 5 years of starting.
Since 2015 a total of 1,503 start-ups have closed in India. Data from Tracxn shows a total of 277
start-ups got shut down in the year 2017. 77% of venture capitalists think start-ups fail because
they cannot hire people. 65% believe that there is no funding. According to survey from social
media 80% of start-ups said that they haven’t benefitted from start-up India mission (IBM, 2017).
There are some issues and difficulties that Indian start-ups are facing. On the other hand, about
10% start-ups are succeeding. In the journal of Business Research, the recent article “University
spin-off’s performance: Capabilities and networks of founding teams at creation phase” (Huynh et

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al., 2017), finds that the entrepreneurial capability of the founding team has the most direct impact
on success during the growth phase. This includes the team’s ability to connect with and engage
specialized knowledge. Meanwhile, the founders’ networks have an indirect positive effect on
company success. (Spellmeyer, n.d.) Their chances of success increase if they have a strong
network and local ecosystem that they have learned to engage at appropriate times. The ecosystem
does not create success itself. Successful firms were found to be more flexible, participative, and
adaptive organizations. These firms had employees who could perform the work duties of others
and were likely to be managed in a way that provided these workers with the flexibility to modify
their jobs to adapt to changing industry and organizational conditions. Lead entrepreneurs of
successful firms were likely to spend more time communicating with partners, customers,
suppliers, and employees than the lead entrepreneurs of unsuccessful firms. Successful firms
sought to become larger firms and embarked upon sales to broad sectors of the market. Successful
firms achieved high market shares; with market shares came higher financial returns. Less
successful firms were restricted to narrow market sectors consisting of smaller customers and those
more difficult to service. (cartner, 2010) . so, what is the gap between these two kinds of start-ups
which are succeeding and not. This gap is something we don’t know about the success and failure
of start-ups. It is required to fill the gap between these two kinds of start-ups because it is important
for employment, development of the country.

Problem Statement:

While we have data on start-ups failures in India, there is no data regarding success or failure of
start-ups in Mysore city. There is also no data on why start-ups succeed and fail in Mysore. Mysore
being one of tourist city in India and one of the unique cities in India which is rapidly growing it
is important for us to know the success of start-ups in Mysore city and it is helpful for the growth
of entrepreneurs in Mysore city.

Project Objectives:

To study start-up success in Mysore city and reason behind the success or failure of startups.

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Research Methodology:

 In depth qualitative method was used.

 Interviews were used to collect data.

ANALYSIS AND INTERPTRETATION

NAME MARKET REASONS FOR REASONS FOR

SUCCESS FAILURE
Adarsh Retailers and Network building, Overpromise and
corporate sector Good relationship underachieve
with suppliers.
Harsha Ml Farmers using solar Taking care for Not doing exact
energy your employees, business suitable to
Identifying need atmosphere of
Mysore
Kapani Singh Automobile Good Team Wastage in R&D
manufacturers
Kushal Corporate people Good team who are It is production-
heterogeneous based sector not for
sales
Kushal punappa Website users Hard work and Lack of co-
finding target ordination between
your coworkers
market
Kaushal Local organic Getting trust from Unwanted expenses
product users local people
Lakshman Agrochemical users Good marketing Financing

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Mayank Agarwal Music listeners Pitching your idea Less market and
into your market population
people compared to
Bangalore
Nikhil Media marketing Low set up costs Less population and
every one can come less profits people
and start by will move to better
identifying target places
market
Pramanand Corporate Creating trust High investment in
Hemdev low market
Pramod Varghese Manufacturers and Networking Not penetrating into
consumers the market
Rahul Gupta Two wheelers and Perfect team Stuck up in their
four-wheeler users original Idea
Rateesh MY Motor sports Co-ordinating team Disputes between
enthusiasts and customers team members
Vinay Industries Adding more value Lack of investors
to your product
Augustine

Name Potential to succeed Actually succeeding

Adarsh 100% 60%
Harsha Ml 70%-80% 50%-60%
Kapani Singh 60%-70% 40%
Kushal 70%-80% 40%-50%
Kushal punappa 80%-90% 50%
Kaushal 70% 50%
Lakshman 100% 50%
Mayank Agarwal 70%-80% 30%
Nikhil 80% 50%
Pramanand Hemdev 60% 30%

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 Pramod Varghese 70%-80% 50%
Rahul Gupta 60% 30%
Rateesh MY 100% 70%
Vinay 90% 50%
Augustine 80 50%

According to the estimation given by the CEO’S 79.33% of start-ups in Mysore have a potential
to succeed but only 47.33% are only succeeding

Why the potential is not up to 100%:

Some of them identified Mysore as a place for product development as the set- up costs are less
and sell the products at some other places where there is large market. Some identified Mysore
being as a low profit zone so, people moving to places like Bangalore and Delhi.

Why Start-ups not succeeding according to their potential:

People are not doing clear market research about Mysore they are thinking Mysore as place like
Bangalore and overestimating but coming to reality they cannot get up to the mark and are
ending up in loss. Some due to going for more investment than the limit they can do in Mysore.

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 Preference

1
2

Target market Background Experience quality of idea finance

Among the 16 interviews I have done, 6 people think that identifying target market as the
Important factor for any start-up to survive. 4 people thought finance, 3 people thought quality of
idea 2 people thought having experience, 1 person thought entrepreneur background as important
factor.

Problems faced by new start-ups in Mysore:

 Investors won’t look into Mysore to finance even the quality of idea is good as the market
is less compared to metro cities.
 Finding qualified workers compared to metro cities is another issue they cannot pay the
staff high as they were getting in metro cities so, they won’t be interested in doing work in
Mysore
 Another problem in founders is inferior complex as many of them are not from higher
background. They feel they are at disadvantage because they are not based in start-up hubs
like Bangalore and Mumbai.

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  They compare themselves with successful founders who are featured in media and find
themselves lacking.

Advantages in starting a new start-up in Mysore:

 Start-ups in Mysore have better chance to create products than bigger cities because the
start-ups in bigger cities don’t know the pain points of consumer living in small towns
will face. Mysore being close to these towns can easily have cutting edge in this issue.
 There is less likely to have competition compared to other bigger cities
 Mysore now being developing slowly, considering the fact that there is better growth for
start-ups in next 5-10 years Mysore is very good place to start a new venture
 Infrastructure in Mysore is good. There is a growth in Logistics, Agri-tech which will
give more access to the entrepreneurs

CONCLUSION:
It would be better opportunity to setup product development in Mysore due to the factors like
size of market, low cost involved but setting up sales would be a difficulty to make the business
a success. Most of the people say that finding a target market is most bothering factor in order to
setup a business and start its operations.

LIMITATIONS:
Getting the contacts of CEO’S is difficult
Getting the interviews from CEO’S start-ups failed is difficult
Time constraints

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Works cited
D'Cunha, S. D. (2017, May 18). 90% Of Indian Startups Will Fail Because Of Lack Of Innovation, Study
Says. Retrieved from Forbes: https://www.forbes.com/sites/suparnadutt/2017/05/18/startups-
in-india-fail-due-lack-of-innovation-according-to-a-new-ibm-study/#3f462016657b

Mehrotra, N. (2017). 90% start-ups in India fail within 5 years: IBM. Hindu:Business Line.

Mittal, A. (2014). Indian Startups: Challenges and Opportunities . Economic Times.

https://search.proquest.com/openview/a2ccf5887669b99b1024532eba14a87a/1?pq-
origsite=gscholar&cbl=24292

https://onlinelibrary.wiley.com/doi/full/10.1111/j.1540-5885.2007.00280.x

INTERVIEW QUESTIONS:

Where did you grow up?

What is your education qualification?

Was this your first start-up?

What are your motivations for starting this company?

Can you share the experience when you started the company in the early
days?

What are the ups and down you have been through?

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How much time it will take for a start-up to settle in Mysore?

What percentage of start-ups do you think have a potential to succeed in

Mysore?

How many of these start-ups actually succeed?

What are the factors behind failure of start-ups in Mysore?

How do the following factors affect the start-ups in Mysore?

Financing:

Quality of idea:

Target market:

Entrepreneurs background:

Team:

Lack of experience:

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