Bottleneck to Success: Case Study on Scaling Up Issues of Indian Start-ups

Abstract

The dynamic growth of start-up companies in India has significantly disrupted the business landscape. However, many start-ups encounter substantial setbacks during the scaling-up stage. This qualitative study explores the challenges faced by Indian start-ups as they scale their businesses. The findings reveal that the primary obstacles include the non-availability of financial resources, difficulties in acquiring the right talent, and challenges in achieving product acceptance. According to the Department for Promotion of Industry and Internal Trade (DPIIT), India is home to over 50,000 start-ups as of 2023, with a yearly growth rate of approximately 12-15%. Despite this robust growth, data shows that about 90% of Indian start-ups fail within the first five years, primarily due to scaling issues. This study highlights that limited access to financial resources remains a critical barrier, with start-ups often struggling to secure funding beyond the initial stages. Talent acquisition is another major hurdle, as start-ups compete with established companies for skilled professionals. Furthermore, gaining market acceptance for new products poses significant challenges due to high competition and market saturation. By developing a comprehensive model, the study demonstrates that government intervention can play a crucial role in addressing these challenges. Initiatives like the Startup India program, which offers tax benefits, easier compliance, and funding support, are steps in the right direction. Additionally, the results underscore the importance of clearly defining problem statements, exercising patience, and possessing a risk-taking ability as essential factors for the success of start-up companies.