Ten years ago India’s start-up sector boomed, driven by accelerated access to internet, the advent of the smart phones and wearable tech and fast paced tech innovations in areas like automation, AI and ML, cloud and Big Data. Today, with enhanced focus on digital adoption across sectors, business innovation through tech has become the need of the hour and start-ups that provide value in solving problems through tech, are flourishing. However, in-spite of being one of the largest business ecosystems for start-ups, one in five new age entrepreneurs are forced to shut shop within first five years of business, due to various challenges. According to a 2019 report, more than 5mn startups are founded every year however, only 10% taste success.

While in 2021 investors channeled $4.4 Bn into Indian startups, 2022 was a bit somber and in February 2023, Indian Startup Funding dropped 81% YoY to $693 Mn. However, despite this challenging environment, there are some start-ups that have managed to become unicorns in 2023 which means there is some formula that helps them become successful, if they can avoid some key mistakes when planning to scale up. These are:

1. Losing sight of a long-term goals

One of the most important aspect of charting a growth strategy and scaling up is to have a focused goal or long term vision for the company and ensuring that all innovations and plans be made keeping that vision in mind. Most start-ups, when scaling up, look at the short-term business needs or look at lucrative opportunities that may not necessarily align with the long term vision. Innovations that add value to the business and expand the company’s portfolio while furthering the ultimate ambition of the company can make all the difference!

2. Chaotic Growth Rate

A sense of stability arrives when a start-up manages to have the first set of retainer clients, which is where it may become stagnant. And to counter that, most start-ups either end up expanding business services or geographies. And while this is good, sometimes unplanned and accelerated rate of growth can be counter effective. Timely decisions must be made with data-backed steps toward the scaling process. Market analysis, performance analysis of existing products/services, ensuring vendor and client relationship growth and management, and tracking cash burn in line with a clear vision of the future plans and goals are a must to scale up strategically and eventually grow at a required rate.

3. Lack of effective Resource management

Resources are of utmost importance to start-ups. Be it capital or human resource, optimizing them is a key to success for any business, especially for start-ups. From effective hiring of talent and molding them for multi-disciplinary job roles for long term growth with the company, to prioritizing knowledge sharing, training and leveraging diversity, can all be very effective for a start-up to make the most of their talent pool. Moving away from just focusing on college degrees and on paper qualifications, creative talent management and optimization can really help build a team that can become the backbone of the company.

4. Lack of focus on building/ investing in core capabilities:

Most start-ups are established with a core vision in mind and a bring a unique business innovation to market, which becomes their core capability. And the rest of the services are built around them. When scaling up or focusing on growth, most start-ups may begin looking at ancillary services and solutions which, although not their core competency, become a part of their portfolio due to market demand. While this is good for a short-term business plan, spending time and resources on building core competencies for the long term is more important. Hence a balance and properly prioritizing the investments to build up proprietary infrastructure to alleviate the niche offerings of business is vital for success.

5. Seeking Funding at the right time

While scaling up is the natural progression for a successful business, charting out when, why and how much financial aid is needed to be infused in the business, is important. Further, finding investors that understand your business and offer a mutually valuable working partnership, is also important. Growth demands money to be constantly channeled into R&D, marketing, sales, talent, infrastructure, and other core areas of the business. It is better to find investors who would either make a major one-time investment or are capable and confident enough to support successive funding rounds. While it can be hard to time the funding round with growth requirements, it is definitely one of the most strategic decision that a start-up needs to take to ensure growth and cusses.

Any start-up’s ability to handle this transitional phase of scaling will determine the success or the failure of the company. Therefore, knowing which mistakes to avoid and points to bear in mind make a significant part of the preparation to scale a start-up and all great ambitions need preparation and research to be achieved. It will help structure the company’s efforts with regard to major strategies to be put in place in order to scale it up and achieve the ultimate goal.


(The author is Swarup Bose, Founder and CEO of Celcius Logistics, and the views expressed in this article are his own)