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How can we prevent a start up from failure?

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On Tuesday, Yogendra Vasupal, the CEO and the cofounder of the well-known startup company “Stayzilla”, has been arrested on the charges of fraud filed by an advertising company.

The company was founded by Mr. Yogendra, Mrs. Rupal Yogendra along with Sachit Singhi as Insra in the year 2005 and was rebranded as “Stayzilla” in the year 2010. It acted as a marketplace for homestays and also for alternate stays in India. It catered for both travellers as well as homeowners who had been searching for unique and differentiated stay experiences.

Though Stayzilla had the first-mover advantage in the marketplace, according to Yogendra Vasupal the company had to deal with high costs because of its numerous pitfalls.

Mr. Vasupal stated that, the mismatch of supply as well as demand which did not exist eighteen months back and creation of new markets so as to expand the business quickly and effectively are a couple of reasons which led to the downfall and the failure of the startup.

The situation, with the help of which it could be said that the most successful CEOs and founders need not always be stable, has become an eye opener and all the entrepreneurs are taking notes on how to prevent the startups from failures.
In order to start a company a particular type of passion as well as the ability to move forward with an idea even during crisis is required. The life of the founders cannot be predicted as it involves huge amount of risks and requires strong protection. They must concede the weaknesses and must concentrate on external as well as on internal issues. They must be well aware and must have strong knowledge on the existing domestic markets instead of international markets as the pros and cons might change based on the geographical location of the businesses.

To be successful, a company must maintain transparency and must be clear about its expectations while handling Business-Business negotiations. The huge amount of costs that incur during the process of expansion of the business must not affect the company and must not be passed on to the buyers or consumers.  A hassle free distribution channel must be created so as to reach the right consumers. As most of the businesses fail due to lack of efficient legal teams it must also focus on legal advisory apart from funding.

Sources:

The Hindu Business Line -
http://www.thehindubusinessline.com/info-tech/stayzilla-shuts-operations/article9557756.ece

The Week - 
http://www.theweek.in/news/india/stayzilla-ceo-yogendra-vasupal-blog-post.html

Times of India -
http://timesofindia.indiatimes.com/business/india-business/homestay-aggregator-stayzilla-shuts-down/articleshow/57324173.cms

News Distill -
http://m.newsdistill.com/redirect.html?title=Stayzilla%20arrest%20makes%20India%20worst%20place%20for%20startups:%20Prominent%20entrepreneurs'%20letter%20to%20Rajnath%20Singh&postId=1490160917069200001

Economic Times -Tech -
http://tech.economictimes.indiatimes.com/news/startups/lessons-from-stayzilla-bite-the-bullet-stay-the-course/57699908
Hackernoon-
https://hackernoon.com/the-emotionally-fit-founder-part-one-what-is-emotional-fitness-628fceaac145?gi=b3f186be887d#.u68vqkvxk
Dose-

https://dose.com/gofundme-is-selective-health-care-for-the-lucky-few-250e0afc7676?gi=5cc2874aa3ae#.kyerjayxa

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