written by | February 17, 2022

Why First-Time Entrepreneurs Fail with their Business Ideas

India is a country where the minds of creative people overflow with new ideas and innovations. Behind every successful business or start-up, there is a brilliant idea. But, only having a brilliant idea is not enough. It also needs proper execution and understanding of the environment. Many people think of brilliant start-up ideas and start their businesses. But, due to a lack of planning and correct guidance, they tend to fail. They fail to adapt to the changing environment and end up failing. Failure is hard to digest, but at the same time, it can prove to be the best teacher for us. 

Wasting our time and money on a business idea leads to disappointment. Many entrepreneurs fail because they don't read about the failure stories of others and why only a few start-ups succeed. So, we must learn from the mistakes of others so that we can be careful when we start our own business. It will help us to save time and money. We have discussed some unsuccessful entrepreneurs, the story of their failure, and the reason for not achieving the desired success. You will understand that some of the business ideas discussed below are great, but they had the wrong execution.

Did You Know? Due to the wrong execution of the idea, 9 out of 10 business ideas tend to fail.

List of unsuccessful entrepreneurs with their failed business ideas


Start-Up Name

Shripal Morakhia


Milind Sharma

Pepper Tap

Aakash Aggarwal


Aditya Gandhi

Purple Squirrel

Nidhi Gurnani

Card Back

Balasubramanian Venkatachalam

Baby Berry

Animesh Choudhary

Hotels Around You

Aditya Naik


Amit Gupta

School Genie

Jasmeet Singh


Amit Gogia

The Punjab Kitchen


Also read: What Practical Problems Can Indian Startups Try to Solve?


Shripal Morakihia founded and launched SMAAASH in 2012. It was a platform for gaming and entertainment with a mix of gaming, sports, music, and dining. Its in-house research was the driving aspect of its initial success. It had 32 centres in 16 different cities of India when it shut down in 2019.

Why did it fail?

The continuous lockdown during Covid-19 was the main reason for its failure, which meant a drastic reduction in footfall. As per the mail sent by the entrepreneur to its employees, they couldn't save the company from its premature death. The company couldn't get real funding which didn't result in a capital infusion that could save the business.

2. Pepper Tap

Pepper Tap was an online platform where customers could order groceries at discounted prices. Founded by Milind Sharma in 2014, Pepper Tap set itself apart by guaranteeing delivery time within 2 hours. The company secured massive initial funding as it was promising but failed to deliver and maintain customer expectations. 

Why did it fail?

Pepper Tap spent a large amount of money to acquire its customers. Inefficient budgeting was the main reason for its failure. The company incurred significant losses because it offered heavy discounts to its customers. The failed entrepreneur realised their venture wasn't financially feasible because of its thin margins. Another contributing factor for their failure was collating inventory from the grocery stores and updating its offerings. It required the grocery stores to update their inventory systems continuously. They ran into issues with grocery stores that didn't use a digital inventory system. Pepper Tap often failed to ensure enough supply of the items, which resulted in frequent cancellations. It affected the company's reputation in the eyes of its customers.

3. Doodhwala

Doodhwala delivered fresh dairy products, milk, and other essentials, as the platform's name suggests. Aakash Aggarwal was the entrepreneur behind the company.

Why did it fail?

Due to heavy discounts and cashback offers, the company's margins were very low. It faced intense competition from established online grocers like Grofers and Big Basket.

4. Purple Squirrel

Aditya Gandhi was an unsuccessful entrepreneur who began the start-up at IIT Mumbai in September 2013. It was a platform specially designed for students for one-day workshops based on their field of study. The mission of the failed entrepreneur was to get the students placed in the companies and in return, get a commission from them. In 2016, it raised ₹ 16 crores, but it had to shut down.

Why did it fail?

This unsuccessful business failed to achieve its promised target. The company had a lack of funding at the time of need. Travel agents proved to be its main competitors. The recognised colleges had tie-ups with travel agents for sending students on industrial visits. The travel agents could purchase the inventory in bulk from hotels, but Purple Squirrel couldn't do this.

5. Card Back

It is one of the most famously failed start-ups. Card Back enabled its customers to see their rewards and offers for all their cards at a single place without sharing their sensitive information. The idea behind the start-up was innovative, but it proved to be unsuccessful after five years.

Why did it fail?

The Indian Economy was not mature enough in 2017 as most people didn't have multiple credit cards. The company needed many investors, but it was not successful in making its customers aware of their information security. When the start-up's failed entrepreneur realised that most people don't have multiple credit cards, they thought of shifting its headquarters to Singapore but failed due to a lack of funding.

6. Baby Berry

Baby Berry was a platform designed for the health and wellness of a child. It offered health records, digital vaccination, doctor discovery, and diet management features. Moreover, it also provided personalised content from doctors and other experts such as paediatricians, psychologists, and nutritionists.

Why did it fail?

This company became unsuccessful because its expenses increased, and revenues suddenly declined. The company’s financial statements revealed that it had no revenue model and had been a free offering. Its net losses grew to 3.11 Crores in 2016-17 from 92.95 lakh the year before.

Also read: Successful Small Business Ideas for Indian Entrepreneurs

7. Hotels Around You

Hotels Around You was a service centre in India for short stay bookings. It provided the booking hotels for two kinds of stays: day transit and night use. The app provided a list of hotels with unsold rooms and got a commission when any customer booked a hotel through their platform.

Why did it fail?

It had to shut down because it had so many competitors with no reason for users to shift to this platform. It offered significant discounts to customers, which didn't help its finances.

8. Koinex

Koinex was founded in 2017 by Aditya Naik. It was a platform designed for cryptocurrency exchange. The business reached its peak in December 2017. During this time, it had a huge volume of transactions. As per reports, the company had around 45000 new users in just 24 hours. The idea behind this unsuccessful business was to bring cryptocurrency to India. But it had to shut down in 2019.

Why did it fail?

Legal proceedings were the main reason for its failure. In 2019, The Reserve Bank of India stated that all platforms dealing with cryptocurrency transactions had to exit their relationships with the customers. Koinex took the case, and it had to shut down in such legal proceedings.

9. School Genie

School Genie was an online Education platform for students. Amit Gupta founded it in the year 2013. The idea behind its establishment was to help schools at large. It aimed to improve the child's development by providing them with solutions. It helped in saving time and overall costs. It also included services such as Cloud Software Service. The start-up had to shut down within a year.

Why did it fail?

The biggest reason for its failure was a lack of experience in the educational sector. It spent money on unnecessary furniture rather than hiring experienced developers. They tried to copy their competitors and paid too much to outside influencers.

10. Jobridge

It was started in 2017 by an Indian Software Engineer, Jasmeet Singh. It was designed to start a job board with an offline-online model. The idea was to post jobs on their job portal, and job-seekers receive the notification on their mobile phones.

Why did it fail?

It incurred severe losses in handling its customers. Job seekers expected more features for a very low price, and the company increased the prices for their services. But, then the users started demanding more features. Operational costs for the company outgrew its revenue. Finally, it had to shut down within a year.

11. The Punjab Kitchen

Amit Gogia and his wife set up the business to offer homemade food services to its users. His wife had a passion for cooking. Amit, the failed entrepreneur, handled marketing and logistics, which was the backbone of the whole business.

Why did it fail?

Pricing strategy and logistical costs were the main reasons for failing. The couple spent more on the packaging, and as a result, the final price of their services was also high. But the customers didn't care about the packaging. The number of customers didn't take off, and it was clear within the first year that it had to shut operations.

Common reasons for failures of business 

We have made a list of the following reasons from the failure stories of famous failed companies. The list of reasons is as follows-

1. Lack of funds - Some businesses start spending a lot of money growing their business. They are unable to acquire new customers. The entrepreneurs fail because they have big ideas but don't have enough resources to make those dreams into reality. Insufficient funds can transform a thriving business into an unsuccessful business. Entrepreneurs must make sure that they have effective business models. The funds have to be used efficiently. 

2. Lack of Innovation - As per surveys and reports, around 70% of businesses don't have innovative business models. Because of innovation, most start-ups fail in their first five years. According to the top 50 innovative start-ups list, some famous businesses are Ola, ChaiPoint, and Swiggy. Entrepreneurs must think about the long-term growth of their businesses, and they must also find the right resources with some innovative ideas.

3. Lack of Talent - According to surveys, about 23% fail because of a lack of talent. Most of the time, start-ups cannot recruit the right candidates for their businesses, and the entrepreneurs must properly conduct the hiring process.

4. Ignoring Customers - The start-ups spend a lot of time recruiting and funding and ignore the customers and their requirements. The start-ups must be customer-centric and must address the customers' problems, and they must also have regular feedback from their customers.

Also read: What are The Best Tech Business Ideas for a Start-up?


We hope that this article has clarified the reasons for some of the famous unsuccessful businesses. As entrepreneurs, one must learn from their mistakes and avoid them when starting your own business. You must take steps to keep your business on the right track, and following the correct guidance can make you a successful entrepreneur.

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Q: What are some famous successful businesses?


• OYO by Ritesh Agarwal

• BYJU's by Byju Raveendran

• Flipkart by Sachin Bansal

Q: What are some of the most famous unsuccessful businesses?


• Pepper Tap by Milind Sharma

• Jabong by Praveen Sinha

• Doodhwala by Aakash Agarwal

• Snapdeal by Rohit Bansal

Q: What are some of the common reasons for the failure of the business?


Lack of innovation, lack of funding, Wrong Business Models, and Ignoring Customers are some of the reasons why startups fail.

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