Starting up is difficult, especially when you rise and fall drastically in a very short period. If your product is powerful and your plans are immaculate, there is every chance that your company will have a wonderful start. However, the biggest challenge in the Indian startup ecosystem is sustainability. To overcome this usual rise and fall, one must always be ready to experiment, embrace innovation, and pivot by adapting to ever-changing trends. The moment you take a step back or relax, things can change drastically.
In this same fashion, many new ventures in India’s burgeoning startup scene manage to soar high and then crash hard. While founders, investors, and other stakeholders might feel that they have lost something, their experience is not without value. Much like the rest of the world, India has seen many success stories, alongside failure stories that are equally relevant. Many recent startups had their rise and fall in recent times, such as Koo, Thrive, Byju’s, FoodPanda, Hike Messenger and many more. This piece explores the rise and fall of—Koo and Byju’s specifically, and examines what went wrong for them, offering valuable lessons for future entrepreneurs.
Koo was launched as a rival platform to X (formerly known as Twitter) and was primarily recognized for its focus on Indian languages. The micro-blogging platform initially attracted a lot of high-profile celebrities as users during a standoff between the Indian government and Twitter. It also expanded exponentially into Brazil, garnering over 10 million+ active users, and becoming the talk of the town.
However, a couple of years later, things started to look bleak as Mayank Bidawatka, one of the company founders, suggested that “The cost of technology services to keep a social media app running is high.“
Koo faced many challenges in staying relevant after a very promising outlook, given that it had a distinct proposition that initially brought significant traffic to its platform. The major problem, according to the founders, was that due to funding issues as well as the market mood, they had to tone down their speed of growth, which affected them significantly. At the same time, one might think that Koo couldn’t offer something different or innovative in terms of user experience, even if it attempted to localize its platform. They did not have the market differentiation, and users did not have any particular reason to shift to Koo by abandoning a fully functional and popular existing platform- Twitter.
This brings us to the important question of what lessons can be learned from Koo’s lack of innovation and user engagement failures. One of the major drawbacks, one might feel, was that it was way too similar to X (formerly known as Twitter) or was pretty much a mirror image of Twitter. As a result, Koo had no unique selling proposition (USP). Due to the hype, the product initially took off but came down rather dramatically in a very short time.
Another factor that might have affected Koo was the fact that it didn’t reach the masses as well as it needed to. It relied heavily on the celebrities it managed to get on the platform. However, had it reached out to the general audience in a better way, the story could have been entirely different.
Finally, they did alienate a big chink of the crowd at build stage by pandering to one side of the political spectrum. Users on social media engage usually when they have other side to argue with. If you build an audience of echo chamber, the adrenaline of engagement is lost due to no opposing side to debate with.
Byju’s is one of India’s biggest startup failure stories. From a peak valuation of $22 billion in 2022 to 0 in October 2024 is something unheard of commonly. Started by Byju Raveendran, a former teacher, in 2011, the platform gained a significant user base very quickly. Due to its brilliant educational content that was engaging, exciting, and different from the classroom knowledge-sharing method, Byju’s had addressed all the pain points and introduced a fresh approach to digital learning. It attracted massive funding that helped it soar higher and higher. They even had the first mover’s advantage in India, a country where parents are so much focused on the academics of of their kids.
The company kept expanding and growing its wings globally. Celebrities like Lionel Messi, Shahrukh Khan, and Priyanka Chopra became brand ambassadors. The company spent exorbitantly on promotions. However, financial mismanagement became one of the major reasons for the fall of the mighty edtech company.
At one point, the company failed to win the trust of its own employees, who were forced to work without pay regularly. At the same time, various tactics used by the sales team to sell the courses also caught the attention of the outside world. These aggressive strategies painted a negative picture, further damaging the company’s reputation.
A very strong critic of the company- Pradeep Poonia, was continuously exposing Buju’s unethical practices, and the company tried to keep shutting him down. They even put a ₹20 Cr defamation case on him. He did not give up and fought against them legally with fellow redditor’s support and finally won, and WhiteHatJr’s parent company Byju’s had to withdraw the case.
As the valuation started to plummet, investors began asking tough questions, and the leadership found itself unable to provide answers. The fall was imminent, but that it would collapse so dramatically—no one could have imagined. This particular rise and fall was very drastic.
Adding to the turmoil were regulatory issues, resignations, and layoffs that compounded the company’s problems. What once seemed like an unstoppable force in ed-tech, quickly became a cautionary tale for entrepreneurs everywhere. In the end, things simply fell apart.
Byju’s experience shows that fast growth can be dangerous when no strong foundations are in place to support it. Sustainable growth is about more than just getting a bigger share of the market. It’s about making sure customers are happy, providing good-quality products, and having clear plans in place to manage everything, especially in a tough industry like Ed-Tech.
Winning the trust of investors and employees is crucial. At the same time, startups must understand that trying to force themselves onto customers using unlawful tactics will only lead to negative consequences long term. The bubble may burst, and when it does, it can destroy everything.
So, what can we learn from the mistakes of Koo and Byju’s?
Startups can fail due to multitude of reasons, but you can always get up, dust off and start again, if you’ve built a good reputation among your ex-employees, investors and consumers. Do not try to leech off of people who help you build a strong base for your startup. It will always lead you into launching better better products when you try again. Your previous startups failures will be a learning step then, instead of burnt bridges. The Rise and Fall of any venture are just two sides of the same coin. Eventually everyone has to face it. The end goal is to prolong the rise and postpone the fall as much as you possibly can.
Rise and fall are a major part of Startups, and it is okay to fail. But fail gracefully, and the market will trust you enough to help you stand up and succeed again, if you have not deceived them. Hope this helps, fellow Desi Founder! You can find even more startup tips here.
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