The 11 Real Reasons Startups Fail – Startup Problems

A startup company is a company that has been established by a group of business tycoons or a single business tycoon who are/is adopting newer technology or newer methods and processes to create something better or improving the ongoing technology for faster delivery of commodities within a stipulated time frame.

Many startups products are not meant for sale and some startups are not having the source from where the revenue can flow.

A Startup is a fresh company that is flourishing. When the company steps on its first strata, the expenses of the company were exceeding the revenues it was minting because they were working on developing, testing and marketing their idea in the public front.

Startups are growing everywhere across the country. The key startup hubs include USA, Israel, United Kingdom, Germany and Singapore so on and so forth( Source: Businessinsider ).

There is a wide range of positivity but the reality doesn’t alter as such due to the explosion of new setups in the initial three years. It is not convincing but materialized. There are numerous reasons as to why the startups fail.

Here short video why startups fail:

 

1) Poor Product:

Building a product without really validating the thought through potential clients is an awful move. As is building a product that takes care of a trivial issue in a client’s life instead of one which is the significant agony hotspot for them.

They need to work on product’s service, process, customer satisfaction and design and many more things. Without these this it’s like half product.

2) Not the Right Team:

Frequently in a rush to dispatch their product early, new businesses tend to assemble groups with individuals who have almost no enthusiasm for the product. This prompts to disappointing results as the people working never give their best for the product.

Related: 12 Things You Should Know Before Starting Your Entrepreneur Journey

3) Lack of Market Need:

When a businessman start a new venture there has to be a target audience in mind because he/she has to cater to the demands of the audience.

The people who starting startup are not visionary about the current market condition as a result the middle class who are larger in demographic division which are the potential buyers of the targeted product but lacks inquisitiveness towards the same.

WhatsApp was incorporated in 2009. When they have launched it at that time it was solving problem of text message. It was need of the market at that time. Gradually they increased their services like Voice call, video call and status.

What happed if WhatsApp still only provide text service?  It might be possible that other social media apps like Viber or Telegram are dominating over them.

4) Lack of Innovation:

Innovation is a key factor in any business. Either they have to innovate their products and services or the only option is close it down.

Why Nokia fail in market? It’s because of lack of innovation. They don’t have products which can compete to the exiting leader in market.

Forbes cover 10 years ago

Why Startups Fail

Source: Forbes

Startup founder and team should have vision for products and service development. It’s not one day process but continuous task. Without innovation Stratup can’t survive.

Related: World’s First Augmented And Virtual Reality Media Portal From India

5) Mis-Timed Product:

The timing of launching a startup is another crucial factor; timing can decide whether it will spiral upward or downward. The product has to be launched keeping in mind the economic scenario of era.

If in case purchasing power of the people during a particular period is not strong then the overpriced product usually becomes an element of exhibition or an antique which has been showcased for sight.

6) Poor marketing:

It’s hard to survive in market without marketing except your product is unique or solving great problem of people. At early stage either startup follow poor marketing strategy or less marketing. This will create big impact in future.

7) Lack of business Model:

Business of the business is business not a charity. Many startups come with idea of no business model. Entrepreneur and startups are too optimistic about their products and think that with their products and services customer will come in their business. At beginning they attract customers but in long run it will be hard for them to maintain and win customers.

Due to poor business model, support system, process and lack of acquiring customer startups fail.

8) Run Out of the cash:

Why Startups Fail

Money is lifeblood of the organization. Running out of the cash is major reason why startups fail. This is due to people started it with lack of knowledge and insufficient information. But in next stage when they required hug funds for further development at that time either they fail to manage it or sold themselves to big player.

Related: 10 Funding Options To Raise Money For Your Startup Business

9) Pivot Gone Bad:

The new business people over the period of time develop affection with their prime idea. They hardly realize they are building wrong product for which they have to go through the pivot stage of developing a product. This results miserably in wastage of time, assets and cash which eventually ends in failure.

10) No network and advisers:

When a fresh company is laying its foundation stone it requires pillars to support it. Likewise, when a fresh company is founded by its great founder who is a new member in the entrepreneurial world require advisers to guide them if does not happen for any sake, the company ends on committing errors and crashes eventually.

11) Pricing and cost issue:

Pricing and cost play vital role in business. Price should not be too mush high or low. It has to be fit in customer pocket.

If Startups fail to manage it then it will be hard for them to run it.

Related: 15 Year Old Boy Who Built World’s First Social Sharing Search Engine

 

CONCLUSION:

A Startup is a new business. The goal of every startup is profit making. But due to multiple anomalies the profit incurred suffers an adversary leading to disaster in Economy in terms of money, image and value.

The factors included are Poor Product, Not the Right Team, Lack of Market Need, Mis-Timed Product, Poor Pivoting, Lack of Networks and Lack of Innovation. The impact of these factors intensified and started hampering the Economic Condition of the country severely leading to the bad turnover and disappointing careers.

Data source is from www.cbinsights.com

 

Article By:

Priya Akarsha

 

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1 Response

  1. Manohara says:

    Very true, Desi_Admin. But, the main ingridient in evaluating the startup idea is to go back to the history. Because, as you know, more than 90% startups fail within 10 years. That been said, chances are somebody had already tried your startup idea, executed and failed. So, this is very crucial or else the disaster is ahead for those startups who fail to do enough market research. The market reasearch can lead to come up with a better product, plan and results.

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