Top 20 Reasons Why Startups Fail


No market need: Startups succeed because they are solving a particular problems users are experiencing.

Run out of cash: Startups can run out of cash not just when they are underfunded, but when they receive too much and spend recklessly.

Not the right team: Lack of motivation, expertise or common vision can all contribute to a startup’s undoing.

Get outcompeted: A combination of details, such as expertise, motivation or funding can lead to one startup outcompeting another.

Pricing / Cost issues: Some startups develop a great, but costly product, leading to underperformance in sales and revenue.

Poor product: If the primary focus of startup founder is not on the product, the end result might be disappointing for the user.

No business model: A great idea is not enough. Founders should have a monetization strategy from the very beginning.

Poor marketing: Some founders err by thinking a great product will advertise itself, they market it to the wrong audience or via the wrong channels.

Ignore customers: Distractions or disputes can take the focus off the customers and their needs.

Product mis-timed: Launching too quickly or too slowly can be equally detrimental to a startup’s success.

Lose focus: Changing visions and ideas can make founders too self-absorbed, causing them to lose focus on the purpose and idea behind the product.

Disharmony on team / investors: Ignoring investor demands or yielding to them too much can hurt a company. The same is true for tension between co-founders.

Pivot gone bad: If pivoting is not done carefully and based on enough supporting data, it can irreversibly lead the whole company in the wrong direction.

Lack of passion: if founders are interested in a product merely for profit and not because they believe in the idea, they can quickly lose traction.

Bad location: Being in a place brimming with talent and ideas can help founders see their startup through. The right place will also have the audience most likely to use the startup’s product.

No financing or investor interest: Lack of financing and investor interest may indicate that an idea has small business potential or that is not presented in a way that captures interest.

Legal challenges: Unexpected legal issues may arise when a startup starts growing into different fields or markets.

Don’t use network / advisors: If startup founders do not use the connection of their investors, as well as their own, hey may not be able to gain sufficient traction.

Burnout: Startup founders often have poor work / life balance and have to jiggle between many tasks, causing them to burn out.

Failure to pivot: Stubbornness and unwillingness to admit a mistake can be quite costly for startups, disappointing employees and customers alike.

Source from DR4WARD