The Story of a Startup in India and how and why it failed
Startups in India are the recent trend, a trend that started in the Silicon Valley has taken India by storm especially in the last few years. We hear a lot of success stories and rounds of funding and many other “startup” phrases and words.
Working in a startup or owning one has become a matter of pride for IIT and IIM graduates. But does anyone care about startups which showed promise initially but failed eventually.
Great men say ‘ One should learn from failures’.
Startups which failed in my opinion did not actually fail, they just became a lesson on what not to do or how not to go about it once you reach a particular stage.
On a personal basis, I have been involved(directly or indirectly) with a handful of startups, even worked for two of them. I agree that does not make me an expert but here I am putting together some of the reasons for the failure of an Indian Startups.
Why is this important or even relevant?
This is just an example for all the aspiring young entrepreneurs who have a great idea and want to be the next $billion dollar business$.
Langhar
Why Langhar Failed?
In October 2013, A 25 year old boy Karanpreet Singh rented a stall at a food festival in Delhi to test his new business plan of selling home-cooked food. Much to his surprise, his pilot was a resounding success.
“AROUND 1,000 PEOPLE BOUGHT OUR FOOD AND WE EARNED RS 75,000 PROVING HOME COOKED FOOD IS A SELL-OUT IDEA”
– KARANPREET SINGH
The enthusiasm of that day has slow cooked itself into Langhar, a community marketplace that enables housewives, hobbyists and professional cooks to commercialize their talent and passion for cooking, online.
Launched in February 2013, the Delhi-based portal-backed by Times Internet incubator TLabs-won $1,50,000 (Rs 90 lakh) at The Ark Challenge in September 2013, among three other startups from India. The Ark is a US-based accelerator program for technology startups.
TLabs, which typically invests in early-stage companies, put in another $20,000 (Rs 12 lakh) under its incubation program in February this year. “The first thing we noticed about their model was that it was disruptive and we thought it could become large in sometime,” saysAbhishek Gupta, Business Head, TLabs.
Langhar’s concept was borrowed from Singh’s mother who cooked and sold biryani, paratha and sarson da saag (a typical Indian dish) in their locality. Her business was a hit and many other ladies had followed suit.
“IT STRUCK ME THAT THERE IS A MARKET WHERE HOUSEWIVES WHO HAVE FREE TIME COULD COOK AND SELL HOMEMADE FOOD TO PEOPLE WHO YEARN FOR IT, LIKE STUDENTS AND YOUNG PROFESSIONALS.
– KARANPREET SINGH
Achievements:
- 30% cheaper than the other organized food chain companies
- INR 3,00,000+ per month revenue
- Sold 2500+ boxes in first year itself
- Langhar reimbursed delivery charges to home chefs
- Enabled home chefs to reach more customers
Reasons for Failure:
- Maintaining quality of home food was a challenge
- Home Chefs provided errant and casual response
- Margins were really low
- Delivery was a big challenge
How did they operate?
By means of a web or mobile app, customer discovered dishes made by home chefs in their area. They had to select the location and the time when they wanted to eat. Dishes were presented with dine-in, deliver or pick-up options. Complete chef profiles with photos, videos, experience information and quality verification were available. The profiles also listed reviews and ratings for each dish and checked the social platforms by allowing for Facebook integration and other feedback loops.
Funding:
Langhar raised US$200 000, the bulk of which came from the government of Arkansas and from undisclosed food industry veterans. Part of the US $200 000 funding Langhar secured is US $20000 equity investment from Times Group, one of India’s largest media companies. Other shareholders include Amity University in India and Clint Lazenby of Conagra Foods in Arkansas.
Career History of Karanpreet Singh:
At the age of 20, Singh founded MITBOTS, a company involved in robotics education in India. The company developed products like robo labs, kits and software that enhanced STEM education, benefiting thousands of students and many institutions across India, the Middle East and Africa. Singh has also been involved in developing robotics projects with UC Berkeley and Carnegie Mellon, security and cleaning technology with Floorbotics and ex-iRobot engineers, and entertainment robots with DAGU, China and European researchers.
MITBOTS was offered angel investments of US$500 000, twice, and has been acquired by a Dubai based education company. Singh was handling product development, strategy, marketing and finance at Langhar.
