Literature Review Example on Success Rate of Startups in India

Published: 2022-07-15
Literature Review Example on Success Rate of Startups in India
Type of paper:  Literature review
Categories:  Business
Pages: 7
Wordcount: 1890 words
16 min read

A literature review aims at focusing on various concepts and findings that have been made in order to give an understanding and the opinions on various studies that have been conducted in the past. The review provides the examiner with insights and gives directions on how to conduct the study as well as what to expect in the findings. Therefore, the review focuses on examining some of the conclusions that have been made regarding successful start-ups and industries in India.

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With the current trend of hordes of startups that are being developed in the Indian market, it has been natural that not all the startup will have to survive in the Indian market. In fact, most of the Indian startups have recorded a serious failure and the result has always been at an exponential rate (Agrawal & Kumar,2018). The great irony is that even though most of the startups have been started by individuals with a lot of experience and knowledge, they still end up failing. One of the major reasons been lack of enough research on timing and audience. It is important when starting a startup to have a good knowledge of the general target audience, with no audience, one has nobody to cater to. The timing of launching a startup is another significant element and most of the startup that has been launched in India have failed due to poor timing.

According to Bhagmar and Verma (2006) study, the findings showed that the only way that cannot be disputed for entrepreneurial to be achieved is through the capability to unleash groundbreaking imagination and integrate the vision to be made. They state that opportunities are available all over, however, not many people are willing to take and pursue them due to fears of the unknown.

In a study conducted by Krishna and Sardar (2011), he concluded that foreign relationships made with India have resulted in high cost due to technological transfers involved. Thus, it is very hard for a single MSME to manage the huge burden of costs. However, he notes that, if several MSMEs corporate and work together, they can share the huge costs involved in transactions of foreign collaborations. On the other hand, Gupta (2010) investigation, he argues that the MSMEs have been at the forefront to stir many economies which have seen a huge impact in various industries actions. He states that his vision on SME is that it will bring changes in the stock exchange accelerating the income and offer a wide range of credibility, improved status, and capital

Conferring to Caliendo et al. (2015) study, there was a significant disparity in subsidized start-ups out of unemployment and those of non-subsidized start-ups out of employment. They noted that there was no lack of typical education within the masterminds of subsidized start-ups. Regardless, many of them were rarely employed as well as have the knowledge and exposure to the industries. Furthermore, they noted that the major problem among the unemployed was regulations on wealth stock that interfered with personal equity and outbreak of loans.

Sharma, (2013), in her study concerning the Indian women entrepreneurs conclude that the women encountered various obstacles like lack of education, legal restrictions, social inequalities and lack of family support. Moreover, she noted several pushes and pull factors played a major role in hindering entrepreneurial efforts. she argues that, if women get empowered and supported in the business, they can be pillars in ensuring enterprises succeed. According to Goyal, Parkash,(2011) study, the found that the current entrepreneurial position is better as compared to the previous state. The state that the economies are taking shape across the country focusing on improving entrepreneurship. In addition, they believe that the government has been involved in enlightening the citizens on the importance of entrepreneurial activities. Also, they argue that for better success, start-ups should work in line with the experts to adapt to the current trends and modifications in the business environments.

Sangeeta, Surendra, and Tailang (2010) investigation found out that the opinion of TIFAC is that there exist minimal programs which are highly regarded in MSME driven by developments in technology which have been associated with enhancement of partnership with both private and public sectors. In addition, they concluded that technology in the Indian economy has never been facing issues for some time. Nonetheless, they agree that innovations and advancements in technology have played a critical role in lifting India to a greater position in terms of economic development.

According to Bhatendra Kumar Gupta (2008) research, they found that SMEs category is the second most-largest employer in India. They argue that due to the increasing economy of India, it is necessary for MSME to ensure they have raised capital to keep their businesses afloat. Furthermore, they urge the representative of the MSME to oversee their needs which slightly differ from those of the large industries. Furthermore, Gupta and Gupta (2014) noted that the major issues that affect the MSMEs include; inadequate awareness, limited resources, and inadequate investments. He argues that durability and growth of MSMEs can be enhanced through operating on the principles of zero wastage and continues improvements in the sector.

Trends in Growth of Startups in India

Trends in Growth of startups is a vital aspect in an enterprise despite the size of the enterprise, this is because survivability of a company depends on how it reaches out and associate with other companies. According to Rauch & Rijskik, (2013), the more a company grows the higher the possibility of it sustaining its operations for a long during of time to an extent of even becoming a global empire. They further mention that most startups in economies like the Indian economies has the tenacity to grow because of the population backup at their front yard. Davidsson et al., (2010), also mentions that growth mindset is a key ingredient that drives the most startup to global empires that have their products in every household across the globe. A small business that does not intend to grow prepares for an expected closure in the near future. Shifting into the Indian market, Brush, Ceru, and Balckburn (2009) note that most small enterprise in the Indian market tends to slow their growth due to some uncertainty of economies of scale. However, at the same time, there is a business that has not shied away from growing because growth has greatly boosted their profits. Sims & Regan (2006) have branded some upcoming startups the "gazelles" due to their tendency to keep growing at an accelerated rate, most tech startups in the Indian market have the gazelle mentality and this has made them super companies within a short period of time.

Rauch & Rijskik (2013) argues that small ventures do not just become successful due to the internal factors but the external environment also plays a vital role in accelerating the growth trend. The continuous integration of internal and external positive factors such as market availability and enhanced entrepreneurial skills in proper correlation bring an outburst of growth as evidenced by some of the Tech oriented startups in India. They further state that the external and internal factors have given most startup founders a blueprint on how to research and combine the right technologies in their businesses. Such has led to the following trends in the Indian startup market.

The trend in Startups Innovation

According to Ayadi-Frikha (2014), innovation is a key ingredient that accelerates the growth and profitability of most startups in India. Innovation in most Indians startups depends on the size, availability of ideas and experts to deploy new strategies and the willingness of the entrepreneur to incorporate the new technology. Wakkee et al., (2015) states that high technologies are good for big companies but for startups, it is better for that entrepreneur to integrate innovation that they can manage as per the economies of scale of the startup. Bentzen et al. (2012), have a different notion as far as startup innovation is concerned, they argue that t innovation is what will yearn great success for a given startup. Their suggestion on innovation is that startups should consider including as much innovation as opposed to most traditional companies whose growth have staggered due to lack of new ideas to implement in their business models.

The trend in Startups Learning

Reid & Xu (2012), have greatly noted that most startups in India have adopted the Google model where the companies engage its workers in continual learning so as to enhance skill and increase market penetration. Continuous learning has been an aspect that most business empires have employed to build a skilled workforce that endeavors to build and make the company great on a daily basis. Indian startups have accommodated this at a higher notch so as to adapt in tight market conditions and to establish dominance. Teruel-Carrizosa (2010), on the hand, has noted that some Indian startups tend to look for an experienced individual who can work under pressure and give the required input as per the expected output of the startup. Additionally, he notes that there are but a few startups who are interested in building a skill set as they grow with young talented individuals with valor and passion to grow. Daunfeldt & Elert (2013) notion on innovation trend is as follows. Growth mindset in most startups is what has made them excel despite the ever-increasing challenges as the startup's growth continuously in a competing market network.

Literature Review on Trends in Investments

According to Carvalho (2016). there has been an increased momentum in finances that are poured into startups in India. The investment trend can be shown by the analytics shown by the bar graphs below.

Quarter to quarter growth Paramasivan, & Muthusamy, S. (2016)

Paramasivan, & Muthusamy, S. (2016) explains that the growth of startups in terms of finances has above 25% quarter on quarter, the main areas that are experiencing robust growth include Mumbai and Bangalore. Bangalore has managed to be on the forefront since it investments have been massive as compared to other cities like Mumbai. Carvalho (2016) in his writing indicates that it is the IT hub of India since most tech savvy's are housed within its bounds. Statics show that Bangalore has over 100% growth of Tech startup on a yearly basis. The statistical analysis of startup trends in India he shows that investment value in Mumbai and Bangalore have risen to over 150% in the last ten years. Some of the companies that are notable in the startup outburst are the Little internet, Blackbuck, Housejoy, Porter medical among other startups that have emerged in the Indian market. Carvalho (2016) also agree with the earlier argument that banaglore is the hub of the Tech savvy startup since it tends to have the right external factors that can nurture the growth of startups in the region. The statistics below show the distribution of startups in India in terms of value in US Dollar and the volume of the startups.

The trend in Funding Patterns in Indian Startups (Paramasivan, & Muthusamy 2016).

According to Kshetri, Nir & Nir Kshetri. (2016), most investors in India are willing to fund startups that do not generate substantial revenue so as it shows that it will be profitable in the future. Startup in India has been able to get fundings from willing investors whom they refer to as angels. Omri, $ Ayadi-Frikha (2014), highlights that over 600 startups received the seed in the year 2015, the funding in the year 2015 was over US$ 40 million. Finally, in trends Paramasivan & Muthusamy.

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