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15 Reasons Why Startups Fail and What We can Learn From it

05 October, 2017


Learn Why Startups fails to Prepare before hand of the given Consequence and Avoid them doing Yourself.



What Makes the Startups stand out from all the others who are not taking any risk. Yes, it is the risk taking that makes them different. They choose to do what they are passionate about or what they want to do and not what they get employed for.


Risk taking involves failures which can never be completely avoided, however if we know a few insights before startup on our idea, we can always have a better chances to avoid some mistakes or pathways and consequently cut down the risk.

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If we start counting than we will find hundreds of reasons for startup failures but the basic and major reasons which can be counted on fingers are as follows:-


Why Startups Fail and what to learn from them
Why Startups Fail?


Reasons of Failure for Business Startups


More and more Startups are emerging and becoming successful with their unique business ideas. However, not all startups succeed. If we understand the reasons why they fail we may keep ourselves prepared and geared up even before starting up.


1. Over Confidence




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Over Confidence- The Biggest Reason for Startup Failure



Overconfidence kills all. It's like a disease that takes away everything. Those who are successful and experts can show overconfidence as it would go with their level and position but for startups, showing overconfidence can hamper their chances of getting success in the business.


You should be sensible enough to take criticism as tool for your development & learning and not be defensive and negative towards it.







2. Poor Marketing






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Poor Marketing-a Top Reason for Startup Failure




Do not ever overlook the impact of marketing. The startup founders/ CEOs often tend to do so which leads to poor sales ultimately.

A marketing plan should be one of the most important step in any startup.

This will help in allocating budget, determining your target audience as well as promoting your business and increasing your customer base.




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3. Geographics/ Location




A bad location is one of the biggest mistakes that could kill your startup.

Everything rest can be managed and changed if not going well but same is not the case with bad location.

If the location of the startup is not perfect than it will not be easier to move it.


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4. Lack of Funds








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Lack of Funds is another Major Reason for Startup Failure





A business lacks in funds when it does not have investors to invest in it, they don't set budget properly, they are not ready to share the profits in the long run when business starts doing well.


Too much cost incurred in product development, no cash to invest in the business as a result of weak background, no support of friends & near ones and hundreds of such reasons are there due to which a business runs short of cash.



5. Improper Strategy





The gaps in strategy and its improper framing is one of the causes that leads to the failure of startup business.


When there are no proper set of principles that would define the working of the business in all kinds of circumstances, the business cannot be proactive in terms of dealing with tough competition, market fluctuations, demand & supply, changing taste & preferences, etc and hence this would result in shutdown real soon.





6. Team Dynamics





There are times when the business is not doing well initially and the team clashes starts taking place.

The individual concern takes over business concern.

This affects the business and it stands nowhere in the market.

Not only this also poor team management & poor dynamics results in inability to develop a good product, poor framing as well as execution of strategy and more.

The end here be like your business game over.



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7. Poor Product





A product that does not solve the problem of customers and is not user friendly either, would not make a place in the market.


Customers look for the product that gives them some sort of benefit be it comfort, luxury, satisfaction, happiness, requirement etc.


Unless the product is such that has something unique to give to the customers and is a problem solver.


The customers won't buy it. A product that fails to meet the needs of the market fails to survive in the market.

Therefore the need is to develop a product after doing a proper research as to what is that customers demand, what is the market demand.



8. Lack of focus





Multiple projects at one time, personal grudges amongst team members, low morale due to lack of funds etc could hamper the working of the business and distract you from your goal. 


A successful business needs a lot of focus and commitment failing at which will lead to unbearable losses.




9. Responsiveness





The business which is not responsive towards its customers cannot flourish smoothly. 

Ignoring customers, their queries, issues etc would provoke them to switch to the competitor. and your business with a permanent lock.

That is the reason it is said that due importance should be given at the time of hiring marketers & salespersons as they are the pillars of your business.




10. Pricing




Overly priced products cannot stick in the market for long as the competitor will enter offering the same at lower price and washing you out from the market.

This is one major reason for failure of startups.


Due to over confidence and to start earning profits in the very initial days businesses tend to charge high fro their product thinking the customers are ignorant but that is the mistake it makes and suffer.




11. Business Idea




Though the business idea is imperative moreover at the initial stages of the business but its fruits can be reaped for long.

A business idea that defines the products & services to be offered, defines the market, the competitors, main players etc and other such areas of importance is considered as good.

A vague business idea drowns the ship of a business before it could sail.


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12. Lack of Flexibility




Some businesses keeps on going despite of running into losses.

They don't want to move according to the market, customer's taste & preferences that keeps on changing reason being the inflexible approach.


These kind of businesses resist to change and hence close down in a short span of time before anyone could know about its existence.



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13. Wrong Timing



Launching product on wrong time also affects in a bad way. Summers product in winter and vice-versa could affect any startup.

Timing is too crucial and to be determined appropriately.




14. Competition





Because of inability to deal with the existing & emerging competitors, startups often tend to fail.

These competitors does not let the new players survive as they have huge customer base, customer loyalty and ever improving & innovative business strategies.


No customers would avoid brand & famous market player and go shop from the newly entered on whom it does not have full trust even.



15. Giving up Attitude






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Giving Up Attitude Can Kill Any Startup


Many startups give up quickly when the business does not do well.

This giving up attitude is one other reason for startup failure.

Unless you know how to fight with the highs & lows in life or market.

You cannot think of growing big.

The Never say die attitude is what takes you high.


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