Startups – an art in itself that constantly evolves and transcends the business world, refreshes and replenishes. While some startup stories are extremely inspiring, not much is known about the lesser successful startups that could not quite make it out there. Despite all the effort, the thinking that went into it, the sweat, the blood, the tears, why is it that some startups just don’t make it to the top? Let’s find out.

  1. No market gap – It has been found that 42% of startups fail due to the lack of market need. Businesses succeed when they try to provide a solution to a problem that the target market is experiencing. If a business does not answer a burning need of the society, if it does not possess compelling unique value propositions, there is no reason for the target market to approach that business, let alone return to it.
  2. Finance issues29% of startups fail due to running out of financial resources. Having substantial financial backing is not enough, how that money is invested is what really matters. It is up to the management of the startup to realize how much money is left and how to best utilize it to lead the startup to the milestone that they want to achieve.
  3. The team – It has been proven over and over again throughout history that the wrong team can upturn even the most successful startups. 23% of startups have been known to fail due to recruiting the wrong team. Weak teams often make the wrong decisions, are weak on their strategy and are poor at executing plans, all of which can contribute to the fall of even the most established companies.
  4. Getting outcompeted19% of startups fail due to getting outcompeted. At the time of commencement, a startup may have the hottest idea in town but as time goes on and others gradually take hold of that concept, they may strive to do it bigger and better, stealing all your shine. It doesn’t do to get too complacent. A startup must always strive to utilize its resources to offer the market something better, to create an offering that isn’t easily imitable and therefore, difficult to outcompete.
  5. Pricing18% of startups are known to fail due to pricing issues. Pricing for startups is an art that must be placed neither too high nor too low for the product to be attractive to the target market. High cost products cause a problem for startups to price their product and therefore lead to the underperformance of sales and revenue leading to the downfall of the startup.
  6. Poor product – It is ironic but amidst all the hullabaloo of setting up your startup, the product sometimes get neglected. It is due to this that 17% of startup failures are attributed to poor products that are not user friendly and often badly conceptualized.
  7. Lack of a business model – Maintaining a startup is not really feasible unless you have an effective business model. This is the very thing that entrepreneurs forget and which is known to lead to 17% of startup fails. How a business operates once it has been formed, how it tackles sticky situations, potential issues and solutions, all must be considered prior to launching your startup.
  8. Poor marketing – No one is going to know about your product, no matter how amazing it is, if you do not market it. Despite the belief of some that a good product will market itself, this unfortunately is not the case as 14% of businesses are known to fail because of poor marketing of the business. It is important to know your target market, know how to get their attention and to convert them to leads which is something most startups seem to forget.
  9. Ignoring the customers – Never forget – Customer is King. So you have a stellar product, a stellar marketing plan and you’ve got your customers’ attention. But do your customers have YOUR attention? When customers give their feedback it is because they have used your product and they like it – to a certain extent and they would like to see it improved. Ignoring this feedback and establishing tunnel vision is not the way to go and this has been proven by the fact that 14% of startups fail because of the startup chose to ignore the feedback of the very people on which their business depends on.
  10. Product timing – Just like everything in life, timing is everything for startups. Too quick or too slow is not the way to go, one must find a middle ground in between these two extremes. If a product is released too early, customers may assume that the product is not good enough and write it off entirely, losing those customers in return. If a product is released too late, the startup may have missed its window of opportunity. 13% of startups are known to lose it all due to mistiming their products.