8 reasons why startup fails
  • 8 Reasons Why Startup Fails

  • Published By:
  • Category: Market Updates
  • Published Date: January 12, 2017
  • Modified Date: May 12, 2020
  • Reading Time: 5 Minutes

Featured Image Caption: Reasons Why Startup Fails

Do you think it is easy for your startup to join Unicorn Club? Think twice. Startup companies create new markets, interrupt the traditional way of business, gets money from venture capital firms, throw launch parties and have the best looking offices. But is it really easy to reach the top and make a billion dollar company. It is not as easy as it appears to be.

The reality is far away from how it looks because we always talk about only successful startups but the fact is that 90% startup fails in first few years of launch. We never talk about failures. Silicon valley’s most striking Mantra “Fail Fast, Fail Often”. Most of the failed entrepreneurs gives speeches detailing their failure. However; most entrepreneurs overestimate the chances of success and the cost of failure.

Before entering into entrepreneurial journey, let’s understand what mistakes to avoid which can turn your startup into a failure.

Starting it up all on your own

Are you an introvert? If no is the answer, then trust me, your friends know you the best. And making them join your startup would prove to be a good idea in the long run. Starting up alone can lead to invitation to a lot of problems in place. You need people to share & discuss your ideas, brainstorm different things & cheer you up when you are not doing great at business. It also prevents you from taking stupid decisions under pressure.

Burning up of the capital

You are an expert at marketing of your product, but did you analyze the manufacturing cost of the product as well? If the answer is no, you need to think of it again as it can lead to increase of cost in the future.

Your idea & product is going great in a market. As a result, you plan to go ahead with a bigger infrastructure in a new geography. Is it really feasible or are you going nuts about expansion? Think twice & do market research of your product before you get down to expansion.

Also, you need to keep an eye on how and where you are spending money. It’s not necessary to have lavish office, throwing parties and hiring too many people in initial days. Try and hire people by paying them not very high salary but some equities so that they can commit themselves for long run.

Having the best people in the industry are always not the key to success

As you are backed up with huge investment, you tend to hire the best in the industry. But are they the right ones for your plans? Have a thought about that as well. Having the most skilled ones in the industry can backfire as well.

The changing market trends & technology can lead to a change in initial ideas as well. What actually keep you in demand is the right people in your team who bring the right change in time.

Your team is not on the same page as your ideas are

No doubt your idea for marketing the product is great, but is the final delivery done by your team on the same page? Is your team skilled enough to handle the pressure along with the growth path?

Teams which are not on the same page lead to delivery of products which are not at all required in the market. As an add on you will also realize the fact that all the team members being on different pages leads to a complete new book which is thrown in the garbage in the end.

Business Plan not in place

The most import thing for startups is to have the right business plan for the long run. Did you brainstormed about all the “Why” & How” questions during formulation of the plan?

Most of the startups step into the pot hole during the concept formulation stage only. You need to plan & go deep into the details of the notion before you move up the ladder & realize that you are still running deep into the hole. Inside out details like operations, funds backup, sales forecasting etc. should be in place.

Were you trying to run yourself over with debt-train?

Yes, it’s true! You had started a cycle of a startup with a debt in place. The clock started ticking from day 1! And you didn’t even realize the clock when you took another debt to equalize the older ones. Is taking another debt the only solution to the current problem. Think well before you step into the debt disaster.

Instead of going into the debt disaster, think of ways to reduce your costs in terms of manufacturing & client acquisition.

Being not in line with the vision

As a startup, data analysis & market research is your best buddy. These drilled down analysis would lead you to picture out your growth in line with your vision. Keep reviewing your achievements on monthly basis in order to be in line with your vision.

Ignoring the End-Users

You just love the product solution you crafted for the market, but did you analyze the feedbacks of end-users as well? Most of the consumers of your product are pretty biased about their preferences. And trust me, they are not so easy to please.

Formulating & crafting changes to the final product according to end-user feedbacks is pretty essential & ignorance to the same can lead to stop down of the startup you had!

As we know some key reasons to the failures now, let’s learn from them & turn them upside down to act as an advantage.

Keep trying, but don’t burn yourself. Have faith in yourself, plan & execute. Don’t execute straight away & repent later. And last of all, don’t try to overcome with only one startup solution for the market while being over-possessed with the same. Ignorance can be injurious & lead to “The End”.

Smarth Thukral

By Smarth Thukral
and am having 15 years of corporate work experience. I am heading enabling function & NRI Product Strategy for one of the leading Start Up in India. I am passionate about writing blogs on various categories like Start Ups, CIBIL, Finance and Blogging.

Member since August, 2017
View all the articles of Smarth Thukral.

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1 Comment

  1. ajay

    Thanks Smarth !

    for the valuable information.

    Despite the fact that many organizations began with a ton of learning and experience, in the end in waste. After an itemized investigation, because of which parcel of Startup Thoughts are not getting effective.

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