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


What Makes the Startups stand out from all others is the risk taking factor that makes them different. They choose the work as a profession for which they are passionate about and not what they get employed for. Failures can never be completely avoided that includes in Risk factor, however if we are well experienced and know a few principles of business before startup on our idea, we can always have great chances to avoid the mistakes and failures.

If we begin counting the reasons for a startup idea failure then we will find hundreds of reasons for it. We are listing here some basic but major reasons responsible for a startup business failure. Have a look:

  1. Overconfidence

    Overconfidence kills everyone. Successful entrepreneurs can show overconfidence as it go with their level and position, but overconfidence for startups can alter their chances of getting success in their idea. Person should be sensible enough and down to earth to take criticism as his tool for development & learning. For a startup idea you should not be defensive and negative towards it.

  2. Poor Marketing

    Don’t ever underestimate the impact of marketing in every business whether it is a startup or developed. The startup businesses often tend to do so which ultimately leads to poor sales. A marketing plan is the most important step in any startup business. It helps in allocating you budget, deciding your target audience for business as well as for promotion and increase your customer database.

  3. Location of Business

    A bad geographical area for your business is one of the greatest mistakes that could fail your startup. Location of the business should be decided as per the target audience. Everything else can be managed if not going well. If the location of the startup business is not good than its harder to move on it.

  4. Lack of Funds

    A business needs funds on its startup, because at that time you don’t have investors to invest in it. Lack of funds, too much cost of product development, no cash to invest in the business are the reasons, no support of friends & near ones and hundreds of such reasons are there because of which a business runs lack of cash.

  5. Poor Strategy

    The space between technique and its improper implementation is one of the major causes that leads to the failure of startup business. If you not have proper set of principles that would define the working of the startup business in all kinds of situations, the business cannot be active in terms of beating competition, demand & supply, market fluctuations, changing taste & preferences, etc and hence this would result in failure of the business.

  6. Team Dynamics

    There are many times in the startup business when it is not doing well initially. At that time team clashes starts taking place. The individual starts taking personal concerns over their business concerns. This affects the business very badly specially at the beginning time and it stands nowhere in the market. Also, Poor team management & poor idea implementation results in inability to develop a good product, improper implementation as well as execution of strategy and more.

  7. Poor Product

    If the custom solution that you are providing is not up to the mark in solving the issue of customer and is not user friendly either, then definitely your product will not survive in the market. Customers are always looking for more comfort, more luxury and more satisfaction. The product should be such that it has something unique to give to the customers and is a solution provider. Therefore, a proper research needs to be done before build up a product as what are the customer’s demand, what is the market demand etc.

  8. Lack of focus

    Doing various projects at one time, team members personal grudges, lack of morale due to lack of funds etc could alter the functioning of the startup business and distract you from your ultimate goal. A successful business purely requires a lot of focus and commitment.

  9. Responsiveness

    Don’t take your business just as a method of one time earning. The business which is unresponsive towards its customers cannot be developed smoothly. Customer Ignorance, their issues, queries etc would definitely assure them to switch to your competitor. That is why, it is always said that importance should be given at the time of hiring new marketers and sales persons as they are the pillars and front end of your business.

  10. Pricing

    Over priced products can never stick in the market for long time as your competitor will start offering the same at lower price than you and vanishing you out from the market. This is also one major reason for the failure of startup business. Due to over smartness and to start earning little profits in initial stage of businesses tend to charge high costing for their products thinking that the customers are not aware of it but that is blunder and it makes us suffer.