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Here’s why most Startups fail

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Startups fail

Startups fail. It’s a given. A majority of entrepreneurs ignore some failures and are willing to continue at any cost. But there comes a time when you need to stop failing. There are various to-do lists for entrepreneurs who are willing to start a new business. But entrepreneurs fail to consider the “Don’ts” when running a startup.

Some of the reasons behind why startups fail are presented here:


Entrepreneurs are often overconfident about their business or product. It is good to be confident about your company and your business plan, but if you are overconfident, you may neglect the possible outcomes. This may result in:

  • No market demand: This is a major reason for failure, as entrepreneurs get tempted to create something unique, but is not something that market needs. If startups are not addressing a specific market problem, there are more chances of failure.
  • No Business Model: Business model is really important to know the channel used to carry business operations and to provide the alternatives in case of any failure.
  • Product released at the wrong time: Startups should move with their customers, instead of moving ahead or lagging behind. There are times when new tech products are launched ahead of time and it’s too early for customers to move with the technology. And if a product is launched too late, it will be entering in an already crowded market.
  • Ignoring customers: This is the last thing any business should do. Customers are at the core of any business. Neglecting customer’s demand or suggestion is the shortcut to failure.
  • Knocked out by competitors: It is really easy to think that your product is cool and it will survive the competition. Sometimes, even if your product has better features it may not be adopted by customers due to its complexity. In the case of tech startups, simplicity is the key. Sometimes, less is more.

Shorter Vision

Many startups fail as entrepreneurs do not plan for long-term. They say if you fail to plan, you plan to fail. Shortsightedness may hinder company’s growth through:

  • Running out of cash: Money and time are limited factors and should be invested wisely. According to a study, 29% of companies fail as they run out of cash in their early stage. Startups don’t have a proper budget or fail to consider the time duration that will be taken by the rounds of funding.
  • Product price: When it comes to startups and new products, pricing is a dark art. Price should not be so high that customers won’t spend on it. Neither should be so low that company does not make any money.
  • Poor Marketing: Often, entrepreneurs only focus on the product and fail to consider marketing. It is really important to know the target market and to make them aware of your product to convert them into customers.
  • Location: Selecting a suitable location for your startup is really important. It is not necessary that your startup will be successful if it is located in the Silicon Valley. Your startup should be located where your target users are.

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