How to Bounce Back After Startup Failure

How do I bounce back after the failure of my startup?

Published On: 9th January 2022 | Updated On: 12th January 2022

Embarking on the startup journey is equal parts terrifying and exhilarating. It can also be lonely and, if failed, extremely soul crushing. Entrepreneurs invest their hard-earned savings, time, energy, and resources and put themselves through the wringer. Therefore, it is no surprise that when the startup fails, it leaves one exhausted and defeated. But, failure is an essential and integral part of the startup journey.

Table of Contents

  • Why startups fail in India?
  • Professional take on Startup Failure
  • Steps to recover from a Startup Failure
  • Conclusion 
  • Frequently Asked Questions

According to a study, India is the world’s fifth startup-friendly country, following the US, UK, Canada and Israel. Despite this, a study conducted by the IBM Institute for Business Value and Oxford Economics notes that about 90 per cent of Indian startups fail within the first five years. So, if your startup has failed, you are in good company.

The study further identifies a lack of innovation of business models and technologies as the primary reason for startup failures. However, other factors need to be considered when reflecting on why a startup failed, including an ill-conceived product, weak management, paucity or misuse of funds, and lack of resources, among others.

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Why startups fail in India?

Why do startups fail in India?

There are several reasons why Indian startups have such high failure rates. Here are the top ten reasons why startups fail in India.

  1. Lack of market demand for the product or service - One of the most common reasons for startup failure is the lack of market demand for their product or service. Often, entrepreneurs are so focused on creating a new product or service that they fail to properly research the market or customer needs, resulting in a product that no one wants to buy.
  2. Insufficient funding or financial mismanagement - Startups require a significant amount of capital to get off the ground, and financial mismanagement can quickly lead to failure. This can include not raising enough money, overspending on non-essential items, or not having a solid financial plan.
  3. Ineffective marketing or branding strategies - Even if a startup has a great product, if they fail to effectively market or brand it, they may not be able to reach their target audience. This can result in a lack of sales or interest in the product.
  4. Inability to compete with established players in the market - Entering a market that is already dominated by established players can be incredibly challenging for startups. Without a unique selling proposition or competitive advantage, it can be difficult to gain traction or make a mark in the industry.
  5. Poor leadership or management skills - Leadership and management skills are critical for the success of any startup. A lack of leadership or poor management can lead to disorganisation, poor decision-making, and an inability to motivate the team.
  6. Legal and regulatory issues - Startups can face legal and regulatory challenges that can be difficult to navigate, especially in India where regulations can be complex and difficult to understand. Failing to comply with regulations or legal issues can result in hefty fines or even the shutdown of the business.
  7. Lack of a clear business model or strategy - Without a clear business model or strategy, it can be difficult for startups to know what direction to take. This can lead to a lack of focus, wasted resources, and an inability to scale.
  8. Weak team or talent retention - Startups rely on their team to execute their vision and achieve their goals. However, if a startup is unable to attract and retain top talent, it can be challenging to achieve success.
  9. Scaling too quickly or too slowly - Scaling a startup requires a delicate balance between moving too quickly or too slowly. Moving too quickly can result in a lack of resources to keep up with demand, while moving too slowly can result in missed opportunities or losing market share.
  10. Failure to adapt to changes in the market or consumer behaviour - Markets and consumer behaviour are constantly changing, and startups need to be able to adapt to stay relevant. Failing to adapt can lead to a loss of market share or even the failure of the business.

Professional take on Startup Failure

“Failure can leave an entrepreneur in abject dejection. But, it is imperative to look beyond the loss and realise how priceless the adventure has been. This journey of bringing an idea to life, executing it, and seeing it fail would have made you richer experience-wise, and it is crucial to use this phase to your advantage”, says SoME Founder & CEO Rakesh Godhwani.

Useful Resources: best communication skills course | career growth courses

In the latest edition of Conversations with Rakesh, Rakesh encourages entrepreneurs to reflect on what went wrong, document the process, and help other entrepreneurs navigate the seemingly unforgiving terrain of entrepreneurship. Get back to work and join companies that see you as a valuable resource because of your ingenuity and determination, he adds. And, invest time in movies, podcasts and books that speak of unsuccessful entrepreneurs and realise that you are in excellent company.

Steps to recover from a Startup Failure

Steps to recover from a Startup Failure

Experiencing failure in a startup can be devastating, but it's important to remember that it's not the end of the road. Here are some steps you can take to rebound after a startup failure:

  1. Analyse what went wrong: Take some time to reflect on what went wrong in the startup. Look at the reasons for failure, the challenges faced, and the mistakes made. Identify the key factors that contributed to the failure and try to learn from them.
  2. Focus on personal development: Use the experience gained from the failure as a learning opportunity for personal growth. Identify the skills that need improvement and work on them. Focus on building resilience, perseverance, and grit.
  3. Seek feedback: Get feedback from other entrepreneurs, mentors, or industry experts to gain a fresh perspective on the startup failure. Take their feedback constructively and apply it to future endeavours.
  4. Network: Attend networking events, meetups, or conferences to meet other entrepreneurs and industry experts. Build relationships, share experiences, and learn from their successes and failures.
  5. Start anew: Use the knowledge and skills gained from the failure to start a new venture. Apply the lessons learned, avoid repeating past mistakes, and develop a clear strategy.
  6. Stay positive: A startup failure can be emotionally draining, but it's important to stay positive and maintain a growth mindset. Use the experience as a stepping stone to future success, and don't let failure define your identity.

Watch the video to learn more:

The following is an edited transcript of the video.

Here’s today's question, “I am an entrepreneur and had a startup. Unfortunately, it didn’t do very well, so I had to shut it down. Now I don’t have a job and feel very low. What should I do?”

I am an entrepreneur and started School of Meaningful Experiences three years ago; I can relate to the pain you must feel because your venture did not succeed. It is hard to see your startup failing and shutting down.

But don’t lose hope, and here are some suggestions for you to overcome this particularly trying situation.

Reflect and Document:

It is vital for you to study and reflect on why your venture failed. Was is it an issue of sales, revenue, product fit, supplier, or people? Was it an execution issue, or was is it an idea whose time had not come? To do that, please get in touch with all the people you were connected with on this venture and get their feedback. Document it and reflect on it because the day is not far when you will start all over again – I am confident you will – and this will prevent you from making the same mistakes again.

Once you document your journey, publish it as a blog. There are so many other entrepreneurs who would love to read your experience to make sure they avoid similar mistakes. One of the biggest problems of the Indian ecosystem is that we are too success focussed and don’t know many stories about failures. When you are an entrepreneur, even one mistake can be extremely costly. Your documentation of how your entrepreneurship did not succeed can help thousands of entrepreneurs save their ventures. It will also help you learn, reflect, and prepare you for the next innings.

You will be A Valuable Resource:

Your candidature will be very lucrative to many companies. They would love to hire an entrepreneur who tried and failed at entrepreneurship and is now available to do a job because those skills will be vital for the company. Choose mid-sized companies that are funded and display solid growth patterns, and apply there.

Or, you could apply to newer startups, for they will also benefit from your experience. Finally, you could apply to one of the many incubators in the country. Choose an incubator, startup, company that does work close to what you were doing. Join them, learn, contribute, build relationships, and find mentors. All these will help you immensely when you start over again.

Podcasts and Movies on Startups:

Go through various podcasts and films about failed entrepreneurship. You will find that you are not alone. Failure is an essential part of startup life. Don’t give up.

There’s this lovely Indian movie, probably the only one depicting sales and startup from a truly non-melodramatic perspective, Rocket Singh: Salesman of the year. It was produced by Yash Raj Films and starred Ranbir Kapoor. It is a small feel-good movie about this young, bubbly guy full of ideas and dreams. He enters a job as an intern, becomes a salesman and decides to start his own venture. But his venture – selling computers – collapses, and his dreams shatter. After his failed entrepreneurship attempt, he walks into a chroma store and, in a heart-breaking scene, is seen ferrying computers and microwaves. But that’s the whole process, these moments bring humility and build character.


There’s a podcast, How I built this, and it is full of examples of entrepreneurs who failed numerous times but never gave up. And, somehow, finally, made their startup dreams come true.

So don’t give up, start again, reflect on all the failures, and fine-tune your strategies. And, when you are ready, start your second innings.

Watch the video on YouTube.


Frequently Asked Questions

How do I change my mindset after a failure?

To change your mindset after a failure, start by recognizing and processing your emotions. Reframe failure as a learning opportunity and develop a growth mindset to view it as a chance for growth and development. Be kind to yourself and seek feedback from others to gain a fresh perspective. Take action to apply the lessons learned from the failure and set new goals. Remember that changing your mindset takes time and effort, so be patient and continue to work towards a growth mindset.

How to relax after a failure?

Experiencing failure can be stressful and emotionally draining, but it's important to take time to relax and recharge. Here are some ways to relax after a failure:

  1. Take a break: Step away from the situation and take a break. This can include going for a walk, spending time with loved ones, or engaging in a relaxing activity like reading or listening to music.
  2. Practice mindfulness: Mindfulness is the practice of being present in the moment and focusing on your thoughts, feelings, and surroundings. Practising mindfulness can help you relax and reduce stress.
  3. Exercise: Exercise is a great way to release endorphins and reduce stress. It can also help you clear your mind and focus on something positive.
  4. Practice self-care: Self-care is the practice of taking care of yourself physically, mentally, and emotionally. This can include getting enough sleep, eating well, and engaging in activities that bring you joy.
  5. Seek support: Talk to someone you trust about your feelings and emotions. This can be a friend, family member, or mental health professional.

How to motivate yourself after a failure?

To motivate yourself after a failure, reframe it as a learning opportunity and focus on the lessons learned. Set new achievable goals and develop a clear plan to achieve them. Celebrate each small success along the way, surround yourself with positive influences, and practice positive self-talk. Remember that motivation can fluctuate, so be patient and persistent. By reframing failure, setting new goals, and focusing on positive self-talk, you can help motivate yourself towards future success.

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