Learning from Failure – Sustaining in Businesses with Delayed Revenue

A lot of businesses have a particular characteristic associated with them, i.e. they take a lot of time to start generating revenue. One such business is the News Business. This is a business which requires a lot of investment of time, skill and money in order to build a brand and a product which can engage its users. Revenue starts once it is able to do so.

Circa News was a news startup which tried to atomize content to deliver the latest news. Its mission was to create a news company where unbiased and concise information could be found. Though the team realized that generating the first revenues would take some time, they tried to raise venture funding to last out the initial phase which they were unable to do so and hence had to close down eventually.

Advice – News startup should realize the nature of the business they are entering and should make their plans accordingly.

Business Ideas Likely to Fail

There are certain kinds of business ideas which I feel are more likely to fail than others. These are generally not able to create substantial value which can help them sustain in the long run.

The ‘Amazon for a Niche’ idea: A lot of new entrepreneurs tend to look at ideas like this. I had a friend who was able to create a successful ecommerce store for dog food in India. Once Amazon entered this space, it’s sales was at par with this startup’s within a period of 4 months. Similar examples can be seen in other online spaces as well.

The ‘Craiglist for a City’ idea: Similar to the above, some entrepreneurs feel they can create a ‘Me-too Startup’ in their city. Unless their scaling is commendable, surviving once a big player enters is difficult.

At the end of the day, I feel the true valuation and survival chance of a startup is totally dependent on the value it is able to add to the ecosystem as a whole.