5 Reasons Why Startups Fail
No one wants to fail, and yet the majority of startups do fail.
To help you avoid the tragic fate, keep reading and I’ll show you
the five common reasons why startups fail.
You’ll be lying if you said that you never dreamt of running your own business. It’s something that can be very rewarding, but success is not always guaranteed and there is an endless number of traps you can fall into. It’s hard to admit that relationships are sometimes just like business—placing yourself into something without assurance and then falling to it afterward can be very heartbreaking. Ouch, that hurt!
1. No Market Need
A study published by the CB Insight, the biggest reason why startups fail is their inability to create a product that the market needs. Maybe there were already better products out there, maybe the market wasn’t ready for it, or maybe, the world just didn’t need what they were putting out there. And maybe, the secret in order to avoid this tragic fate is to test your idea before you start up. Don’t be too excited by your idea that you fail to look at it from a 360-degree perspective.
2. Ran Out Of Cash
A run out of cash is generally what sinks new businesses and even the already established ones. This should be addressed as effectively as possible during the research stage but if you’re not financially minded, you must have someone on your team who is.
3. Inadequate Team
23% of startups fail because they didn’t put the right people in place. Choosing who to work with is as important as choosing a life partner. It’s all easy to go into business with the people you know well or think just like you—but it can also end in tears.
Every company, especially new businesses, must have a thought-out strategy for recruiting key employees. Remember to also consider hiring diverse people in your business, a team that can innovate, adapt, and execute, even in times of crisis.
4. Get Outcompeted
Getting outcompeted is another reason why 19 percent of startups fail. It may be because they don’t actually know what they’re doing or didn’t understand their field before jumping in. As a startup, need to get yourself ready because everything is a competition. If you don’t know how to play the game, then you will eventually find yourself in hot water.
5. Poor Leadership
But perhaps, the major startup-killer of all isn’t the marketing, money, or the product. It’s the leader who creates more challenges for the business, rather than solutions. A competitive leader will be smart enough to avoid the reasons that were mentioned above.
As a founder, your soft skills are as important as your business skills. Everyone’s role should count and be part of the growth of the business.
Got that, founders? Failure is part of everyone’s success. But the last thing your client wants to hear from you is that failure is a common thing, rather they want to feel that you’ll move mountains amidst circumstances in order to succeed.
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