Ain’t that the truth! It’s estimated that 90% of all startups fail, with the majority failing in their first year. Most of the time, it’s simply because there wasn’t a market for their product, or there was one, but they didn’t know how to market it properly. Here are the eight biggest reasons why startups fail.
Their Product Doesn’t Solve a Real Problem
Maybe it solves one immediate problem that they had, but will it solve the problems of others?
They Don’t Know How to Market Their Product
The flip side to that coin is that they have an idea that solves a real problem, but in the end, simply don’t know how to market it effectively. Creating buzz for a product is just as important, if not more important, than the product itself.
Your company is your sales/marketing department: don’t ever forget it!
They Didn’t Do Their Research
Jumping into an industry without properly understanding your competition is a death warrant. Even if you product solves a problem in the market, that doesn’t mean someone else hasn’t already done it better. Having a head start over the competition is invaluable to your success: no one wants to start a marathon an hour after the gun sounds.
They Never Learn to Say “No”
Early startups just can’t seem to stay focussed on their main goal, and without a clear purpose, a product will lose its vision. Startups need to learn to say no to the outside forces that will try to pull them in different directions. If a client requests a new feature, you don’t have to add it. What you need to do is ask yourself, “will this feature help the core goals of my product, or is it clutter?”
You don’t need every feature to get sales, and you don’t need every feature your competition has to succeed. You need the features that solve the problem you’re there to solve: no more, no less.
They Had No Plan Other Than “Make Money”
If money is the only factor driving your decisions, that will be conveyed in your work. You have to be passionate enough about what you are doing to stay focussed on it through good times and the bad.
Starting a business only to make money is a sure way to not make money. In your personal life, you work so that you can pursue your passions, and ideally, in your professional life, you work to make money off of your passions.
People want to be surrounded by truly passionate people. They feed off of it. Make that passion show up in your work, and the money will follow.
They Didn’t Budget Properly
Planning your startup can be difficult. Technology is expensive, rent is expensive, networking is expensive, conferences are expensive, employees are expensive.
Starting a business without properly determining how much money you’ll need for the first two years, and actually having that money on hand, and then actually sticking to a realistic budget will be your kiss of death.
Compromises in the early stages of a startup are absolutely vital: Maybe you don’t need that fancy office right away?
Their Goal Was To Be Bought Out
Far too many startups are only in it for the big payday. They read stories about tech giants paying millions for another startup and figure this is par-for-the-course. It isn’t, and the realistic chances you’ll be bought out and slim to none. You have to be invested for the long run.
They Blame Others
The ultimate kiss of death: when you start passing the buck.
Learning that you aren’t perfect, understanding that you will fail (probably a whole lot), understanding that a true leader accepts responsibility for his team’s failures, and most importantly, learning and growing from those experiences, is the single most important lesson an entrepreneur can learn.
Check your ego at the door and learn that you aren’t perfect.