Dear Colleagues!  This is Asrar Qureshi’s Blog Post #702 for Pharma Veterans. Pharma Veterans welcome sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to for publishing your contributions here.

Reasons for Failure

I am emphasizing once again that 90% or more startups fail worldwide, disregarding which industry they belong to. Failure in Pharma Industry is even higher.

Let us look at the reasons why it is so.

Unclear Plan, Unclear Expectations

Pharma industry is among the most formal industries. Analysis, planning, strategies, tactics, are everyday words and work. And all this is done on paper, and on Excel sheets, and PowerPoint presentations. However, when the same people get into their own business, they have no written plan, no defined strategy, no resource planning, and no targeted outcomes. It is in stark contrast to what they have been trained about. It cannot be that they did not believe in the power of planning; they had been doing it and seeing its impact for years. It is probably another mindset which says we know how it works, we shall work hard, and make it happen. There is no doubt that they work hard, but their direction is undefined, and the destination is hazy. Many colleagues I know have gone this way and suffered. When they had come to share the good news in the beginning, I had asked the same questions about a written launch plan, written strategy, milestones of achievement with timelines, none had any. I emphasized but I could see that it was not registering. The excitement of getting own enterprise was so great that it defied all reason. The outcome was mostly as was expected. There are another kind of people; they think while they go, thinking on their feet as it is called. They can work without a written prior plan to a large extent, but they are a minority.

The importance of planning is too big to be ignored, and the cost of losing is very high.

Shortage of Finance

The most quoted reason for failure of enterprises worldwide is that they run out of finances. Small and large scale entrepreneurs both have limited finances vis-à-vis their requirement. Unless they handle money judiciously, they are sure to run out early. There are several investments which have no return: registering a name, taking a domain, registering the firm through a lawyer, getting stationery printed, getting a license, paying to the category holder etc. are some investments which have no tangible return. An office space is also needed mostly, which is a sizeable cost along with office staff cost. Investment in the stock is the kind which will give return, but even in this case, the investment is bigger, and the return comes over time in bits and pieces. Getting financially drained is quite expected, particularly if the spending and cash flows are not strictly managed.

Financial hardships sap energy from the mind and heart of entrepreneur. Rather than focusing on business growth, he/she gets bogged down with the struggle to keep the business and office running. The problem is compounded further when the news leaks out that the enterprise is having financial difficulties. People first get edgy and then jump the ship which in their calculation is sinking. The pressure mounts and the entrepreneur and enterprise collapses.

There are numerous instances where such entrepreneurs have lost their life earnings/savings and incurred huge losses which they had to return over many years. It is a sad ending to an exciting beginning.

Wrong Partnerships

Too many enterprises are started in partnerships; between previous colleagues, a senior and one or more juniors, friends, relatives, and an investor and a worker. All partnerships are welcome, but none lasts beyond a few months or more. It is also pertinent to mention that the partnerships break early if the enterprise is in difficulty or is hugely successful. The stress of impending failure or winning a jackpot is always impossible to handle. The partnership breakup leads to loss of those who were once near and dear and light of life.

The first reason for end of a partnership is misunderstanding. It could be about the work done by either party, or perks enjoyed, or the difference of opinion, or misinformation coming from here and there. Emotions run high and reasoning gets low; the end is a bitter breakup.

The second reason is mutual blaming of who did or did not do what was needed. Because there was no clear plan to begin with, the blame game becomes easy. Both parties lose, but they go this way.

Partnering with a senior is difficult because there is an existing protocol between them which stops the junior person to confront the senior when thing go wrong. Keeping quiet due to respect adds to stress and finally the junior partner walks away silently and sullenly.

Partnering with an investor is the worst partnership. An investor invests to earn profit, not incur losses. No matter what is said before the start of the venture, the investor’s sentiment remains the same. It may be discussed how much time may be taken to become profitable, and the investor may agree also, but soon he becomes disenchanted and starts putting the pressure to do better. The professional people believe that they have the skill which the investor does not have, and they have upper hand in this equation. It is a misconception; the investor always has the upper hand. He can hire a person as employee to run the show, rather than having a partner and sharing profit. An investor always invests wisely and safely, and that is why he is an investor. Some professional partners think they can outwit him, but it is not workable. Finally, partnership between investor and professional is the weakest and the most vulnerable type.

Partnerships do not last, is known, but partnerships are still formed every day. Great caution is needed in this area. It is better to work independently on a small scale, rather than going for a bigger enterprise in a partnership.

To be Continued……

Disclaimer: Many pictures in these blogs are taken from Google Images which does not show copyright ownership. If a claim is lodged at any stage, we shall either mention the ownership clearly, or remove the picture with suitable regrets.

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