5 Reasons Why Startups Fail

Failure being one of the best teachers is also devastating, dreadful and tiresome for the people. We Humans have a basic methodology; we want only roses but never want to see the thorns. Life being utterly simple is nothing but a mixed bag of successes and failures. While some rise from the graves others gets buried deeper. There are companies like Apple, Google, Facebook, and Microsoft which are successful but there are many startups in this era who have failed. These few the then startup have risen to become todays giants. A number of have succeeded but a massive number has failed at the same time. There is a very thin line between reasons of success and failure of a startup. Just a small mistake and everything is ruined. It’s almost the case for big businessmen that they have failed, either once or many times doesn’t matter but the thing that matter is they have failed and again stood up.

Today I am sharing some important reasons for the failure of startups. There are enormous numbers of small and big reasons for failure of these young companies. We have tried to summarize this whole into a five-point summary.

1. Team - As it is said an employee can change the face and fate of the company. In the startup this problem is much bigger. A team means bunch of people working on something altogether. It is true that every one of us have different opinions and viewpoints but in a team they all work together to make something. The team is combination of small efforts put by everyone individually. Issues start arising when there is conflicts based on stakes, position and many other small factors. Other factor like lack of motivation of the same level in all the co-founders. The team not able to get attached to the vision of the company also constitutes the reason.

2. No Market Need- New companies are born to solve some problems of the real world. Mostly all the startups are created with a vision to solve something. Some ideas are good but they don’t actually cater to solving any problem. Those who solve problems are good and will see a scalable future but those with poor/no market need fails to scale up and die in the middle.

3. Runs out of cash- According to a data 3 out of 4 funded startup shuts down their operation. As the case is right now that most entrepreneurs are forced to believe that you need investment to make a successful company seems only like a hoax. There is record for many funded startup who has spent their investment recklessly are forced into the darkness with no cash left for their operations. Giving too much discount, spending heavily on useless marketing caters to this problem.

4. Lack of Mentors- Every team needs a road created for them to travel on ad build a better future. The building of road for Startups is a work for the mentors. Without a good mentor a startup is like a sailing ship in the vast pacific without its captain. Every unicorn of today has seen some of the greatest minds working for them either in the form of employees or as a member of Board of Directors. I strongly believe that young mind can achieve about anything but still it needs a compass that always takes care about the traveling direction. Mentors not only bring experience and work ethics to the company they also bring lively environment and helps the team to stick to the vision. Lack of mentors is amongst the most dreaded disease for the startup industry.

5. No/Very less profit- Every business has end goal to earn money and make profits to the investors. We believe strongly that every startup can’t earn the same but at the same time it is also true that profit is the need. Many young entrepreneurs out there fails to realise this and that leads to self-destruction.

While failures are temporary so is the success. One should not attach either of them to their hearts. The only way to see whether you will win or lose is to TRY.

I believe every Entrepreneur is a winner in the end game of life. Whether their startup succeeds or not they push the human race forward to self-dependence.