Dear Entrepreneur, Here Are Top 12 Reasons Why Startups Fail

By Getrude Mathayo / Published May 25, 2022 | 3:54 pm




KEY POINTS

When you build a better product than existing offerings, it’s likely that large companies or new startups will enter the space and chip away at your market share.




KEY TAKEAWAYS


Many startups won't plan into the future because they feel like their idea for a product or service is enough to garner success.

While having a great idea should help you in the early stages of forming a startup, you need to combine this product with a comprehensive business plan if you want sustained success.


For every successful startup, countless others fail, sometimes mysteriously and often unnoticed. Running a startup is a difficult endeavor for any entrepreneur, which means that you’ll experience a significant number of struggles in the early months and years of this process.

Before you go through the lengthy and complicated process that comes with building a successful startup, it’s important to understand that all companies run into their share of problems.

If you want your startup to garner success, it’s essential that you do what’s necessary to overcome these problems. The issue with attempting to create a successful startup is that there are many reasons that a startup can fail.

Whether you don’t plan properly for the future or attempt to expand too quickly, there are a myriad of moving parts that you’ll need to handle effectively if you want your startup to see continued success in the years to come.

  1. Failed to understand/gauge the market

Many entrepreneurs go into a startup pumped about a new idea, with grand visions of selling a million units in the first year, but without an accurate understanding of the market need for their item. It’s impossible to drive meaningful innovation without a full concept of what’s out there.

  1. Ran out of capital/Failed to raise new capital

A primary reason why small businesses fail is a lack of funding or working capital. In most instances, a business owner is intimately aware of how much money is needed to keep operations running on a day-to-day basis.

  1. Bad market timing

Sometimes a startup has a great idea but doesn’t time a major product launch or marketing push well. Unfortunately, it may only take one ill-timed move to cause the startup to fail, if investors get wind of the poor decision-making and decide to bail.

  1. Lack of Planning

Many startups won’t plan into the future because they feel like their idea for a product or service is enough to garner success. While having a great idea should help you in the early stages of forming a startup, you need to combine this product with a comprehensive business plan if you want sustained success.

  1. Lack of market need

When thinking about your own product, consider this: are you truly solving a widespread pain point, and do people really need what you’re offering? Is your product a vitamin, something that is nice to have but doesn’t necessarily solve a major problem? Or is your product a painkiller, an absolute necessity that targets the pain point directly?

  1. Wrong team

Having a cohesive group of highly motivated, persistent, and diversely skilled people is crucial for startup success.  It’s important that the team be united around a common vision and has agreed upon the startup’s long-term goals so that everyone remains on the same page as the startup grows.

  1. Too much competition

When you build a better product than existing offerings, it’s likely that large companies or new startups will enter the space and chip away at your market share.

  1. Pricing issues

Figuring out how to price is always a challenge. For startups, it is a constant compromising act between pricing high enough to maintain healthy margins and cover operating costs, while also needing to price low enough to entice customers

  1. Poor products

If you’ve thought of an idea for a product and believe that it would sell well when placed on the market, it’s essential that this belief is backed up by market research. First, ask yourself if the service or product that you want to develop provides any kind of value.

  1. Flawed business plan

Having a business plan is Startup, and just about everyone knows you’re supposed to have one in the early stages of any small business. But just because you have a business plan doesn’t mean it’s a good one.

  1. A weak foundational partnership

When co-founders of a startup don’t work well together, it often makes startup success difficult or impossible. Communication can be a major problem for partnerships that are not built on a shared vision and values.

  1. Not Being Customer-Focused

Numerous startups will fail to find success because they aren’t customer-centric with their approach to running a business. If you want to obtain continued success, you should show your customers that they are important to your business.

Related Content: Kenyan Wealth-Tech Startup Launched in Nairobi






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