Why Startups Are Crashing Faster Than They Can Soar

Let’s face it, the startup world is a bit like a carnival these days. New businesses pop up with all the fanfare—bright lights, loud slogans, and a stream of tech promises. Investors line up, throw their money at the “next big thing,” and a couple of years later? Poof. Gone. Like cotton candy after a rainstorm, they dissolve into thin air, leaving behind a sticky mess and many people wondering, “What just happened?”

We’ve all seen the headlines—Airlift, Blinkit, Byju’s, CarDekho, Cars24, Cazoo, and dozens more, laying off employees faster than they hired them. It’s not just tragic for the employees; it’s a bigger issue that begs the question: How did these seemingly foolproof, billion-dollar ideas crash so hard, so fast?

The Unspoken Problem: Business Sense (Or the Lack Thereof)

My experience working in and around startups has taught me this: many founders have a great product or service but lack business acumen. They’re like a chef who’s a whiz in the kitchen but can’t keep the restaurant afloat because, well, running a business requires a whole different skill set. And just like every aspiring soccer star needs a coach, every startup founder needs a mentor to show them the ropes.

Yet, what do most founders chase? Funding. Funding, funding, and more funding! And hey, I get it. There’s a thrill to securing that million-dollar cheque. But with great funding comes great responsibility (and usually a whole lot of pressure). The problem is, that many of these newbie entrepreneurs dive headfirst into the cash pool and forget to learn how to swim. Before they know it, they’re drowning in debt, struggling with mismanaged teams, and making wild business decisions just to “stay afloat.” And who bears the brunt of these bad calls? The employees. Thousands of people end up unemployed while the startup dream shatters like a cheap wine glass.

Why Funding Alone Isn’t a Magic Solution

In the good old days, “growing a business” meant, well, actually growing a business. Slowly, sustainably, with long-term goals in mind. Today, it feels like everyone’s in a race to be the next unicorn, burning cash on lavish offices and “employee perks” instead of focusing on the essentials, like, you know… profits? Business strategy? Market adaptation?

Take Byju’s as an example. Great product, right? Helps students, and supports teachers. But somewhere down the line, they skipped over a very important chapter in the Startup Survival 101 textbook: realistic strategic planning. And when strategic planning goes out the window, it’s only a matter of time before the company follows. As an educator myself, I believe in the value of a strong product, but without a sound business model to support it, even the best ideas will flop.

Platform Fees, Commissions, and Other Fancy Terms

Look, the business model of charging a “platform fee” or taking a commission from an organized service can work like a charm—if done right. It’s lucrative, and it makes sense… until it doesn’t. The temptation for quick money can lure startups into that murky area where aggressive business practices overshadow ethical ones. And when the pressure mounts, lines get crossed, ethical standards slide, and suddenly, a company that started with high ideals is running on fumes, using aggressive tactics just to keep going.

A business isn’t a sprint; it’s a marathon. But with this intense “funding frenzy,” young and ambitious entrepreneurs treat it like a 100-meter dash, doing anything to “win” (or, in this case, grow as fast as humanly possible). Instead of focusing on longevity, many founders get carried away with the immediate thrill of success, only to stumble on the fundamentals.

Here’s the Bottom Line

Starting a business is tough—there’s no getting around it. But the solution isn’t a truckload of funding; it’s guidance, mentorship, and good old-fashioned business sense. Think of it this way: If you’re an aspiring athlete, you don’t ask for fancy gear before you’ve even learned how to dribble or swing. You ask for a coach to guide you. Startups need the same thing.

If we want to break this cycle of crash-and-burn startups, we need to stop idolizing funding and start focusing on real, sustainable business practices. The next time you hear about a new startup’s success, remember to ask: do they have a good product? And, more importantly, do they have the business sense to keep it afloat?

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