The Startup Bubble

With the advent of growing technology, it is no secret that every Tom, Dick and Harry identifies themselves as an 'entrepreneur' belonging to a 'startup'. It is clear that the core of any startup heavily relies on innovation, entrepreneurship, and commitment. Every organization or company has been a startup at some stage of its development. Now the question arises, does the startup bubble in India grow into an ecosystem or does it burst?

Budding of Indian Startups

Indian startups serve as nectar pools of opportunity. They posses cause for their survival. Although with technology being as simple as a push of a button, it takes a lot more for a startup to thrive than just an idea. For a startup to mature into a fully fledged company, it must meet a certain number of sales and hit profitability over a period of investment. Benefitting from the surplus advantage of holding a huge target market, in 2018, over 1,200 startups sprang in India. The bubble is certainly growing but how far long until it bursts?

Bursting of the startup bubble

Too many cooks spoil the broth, does the startup bubble follow the same fate? With every third person jump-starting his startup career, often does his startup fail to produce the desirable maturity and profits in the long run. According to research, the investor enthusiasm for the country's tech startups has waned drastically. Weaker startups are laying off several employees and even shutting down altogether. The effects of the bubble are such that, a lot of the companies that were initially considered 'high performing', are now crashing miserably.

The lack of professionalism added to the incompetence of the immature entrepreneurs also sow the seeds for a startup to fail. Students abandoning their education in hopes of becoming part of this startup bubble fail to identify the gradual bursting of the bubble. They possess little or no knowledge of what they are doing and where they are going. Furthermore, it is no surprise that the slowdown has occurred in spite of the booming Indian economy and low inflation rate. Some may even argue that it is wise for the market, that startups are not receiving funds mindlessly- a probable reason for its destruction.

What’s next?

As a result of the bubble bursting, one can easily predict the foreseeable flushing of dollars down the drain. If not a major collapse in the capital, it would at least damage the momentum for startups that are entering mid-stage along with future potential startups. Therefore it is wise for investors to choose only a handful of potential entrepreneurs. The only thing that these entrepreneurs must make sure is to avoid burning too much money and control losses.

In the absence of a feasible and lasting structure that promises not only a sustainable, but also a long term return on the investment, startups will inevitably meet their end. In sum and substance, the startup bubble is a wake-up call, to all the potential investors. The bubble of innovation may prolong and thrive in itself, however, the startup bubble is merely a house of cards waiting to tremble over.