10 Reasons Why Most Startups Fail And What To Do About It
Statistically speaking, 90% of the startups fail. There can be n number of reasons for this but it’s different for every startup. Every person’s entrepreneurial journey is different. But below are the most common reasons that led to failure of startups, most of them closing off in the first year.
1. No market for the product
You have designed a product which nobody wants. I know it’s harsh but it’s the truth. Whenever you’re starting a business, first thing you have to see is if there are people available who would benefit from your product. You want to design a product which would solve someone’s problem. A product which becomes a necessity for people. Now that is the kind of product or startup that wouldn’t fail if launched and marketed properly.
2. Failure to pivot
This is one of the most common reasons why startups fail. They don’t pivot as quickly as they should from a bad product or a bad hire or a bad marketing strategy. Being indulged in a bad idea or a bad product will eventually lead to failure of the product or your business per se.
But it’s not just that a bad product would lead to a startup failure. Sometimes a good product that is too expensive to be functional would also lead to shutting down of your company.
So the minute you see any sort of failure, it’s time to pivot or else you’ll loose your business.
3. Failure to network
Failure to take advantage of the network you have will probably lead your startup to fail. Many times we don’t expand our network and that’s the biggest mistake we could be making. You have to get the investors involved. We make this mistake probably because of being new into this entrepreneurial world and hesitant to ask for help.
It’s not bad to take help from others. Taking help from other people will let you climb up that ladder real fast.
4. Lack of passion
If you’re not passionate about your own product or business, how can you expect other people to spend their money on your product. You have to be passionate about your business, about whatever you’re selling. It could be a product or a service. You just have to make sure you’re selling it with full enthusiasm.
Startups fail because they fail to sell their product with the passion that they built it with.
5. Wrong timing
Many times, everything is on point but we launch the product at a wrong time meaning it was needed before or might be needed in the future but definitely not needed at the present moment. Many companies’ products have failed solely because they launched a perfectly good product a wrong time. So always make sure you’re putting your product in the market when it’s most needed.
6. Ignoring customers
Your customers are making your business run. There are many cases where the customers are happy with the product but not with the service that comes along with the product which leads to customers eventually abandoning the product. But you don’t want that, right? You have to get your customers hooked on your product.
You have to make your product and your service available to your customers at all times. A good business isn’t just about launching a good product, it’s about maintaining the quality of the product and keeping your service available to your customers whenever it’s needed.
7. Bad marketing
The most important part of a successful business is knowing your target audience, getting their attention and converting them into successful leads. You might have an amazing product that has a good audience but if you fail to market that amazing product of yours, what’s the point!
A good product with bad or no marketing is as bad as no product at all. So hone your marketing skills and make your product available to the widest audience possible.
8. Cost Issues
You cannot raise the price of the product too high because then you wouldn’t have a large audience to sell it to. Selling it for cheap will drain your finances. Pricing your product right is a really tricky business.
It has to be affordable enough so that a large audience can purchase it and yet costly enough that allows you to make a good profit from it.
9. Failure to compete
Whenever a product or an idea is getting heated in the market, you’ll see many people participating in the race. The idea might not be originally of the person selling the idea. And that’s what makes a good business man/woman.
Grabbing a good opportunity and making the best of it is business. You don’t have to obsess about your competitors all the time but you shouldn’t neglect them either. But on the same side, you shouldn’t start unethical practices just to get ahead of your competitors.
10. Bad team
A company cannot be built by just one person. A single person’s hard work wouldn’t determine a company’s success. Every member of the team has to work as if it were their own dream.
A good product with a good team and a good management will decide a company’s future. Such a team isn’t just available anywhere. A good team is built over years and with constant efforts from every member of the team.
Let’s learn from these mistakes and not let our startups fail. What’s your startup about?