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20 Reasons Why Startups Fail

by Matej Njiri16. May, 2016

20 Reasons Why Startups Fail

It is true that almost 90% of startups end up failing. There are few mayor reasons why this happens. One of the biggest reason why companies end up, is that they run in a problem where there isn’t enough reason or value in product to convince someone to complete the purchase. Also, the timing could be wrong for marketing certain products. You could even be ahead of the market for few years and customers are not ready for the given solution at that point. ¬†Sometimes the cost of acquiring someone can be more higher then the amount of value you can get for having that customer for life time. It’s blatantly obvious that you need to attract customers for much less money that they will generate for you in terms of value.

Another issue that cause startups to fail is having a poor management team. If you have weak management team expect mistakes in many areas. They can be poor at executing which can also lead to worse things like not getting something on time. They can also be weak strategy builders. This will result in building product that no one will want because they failed to validate product even during its development stage. They are also used to building poor team and this just goes into circle. As a result of this, business will end up with poor execution and weak.

Startups also fail because they simply ran out of money. So if you are by chance CEO of company you have to understand how much money there is still left and if that will be enough to carry the business to its success and future cash flow.

In best scenario it would take someone few product revisions to get it right and fit. In worst case, the product will be total blowout with complete re-thinking required. Eventually, this is what happens, it’s perfectly clear that the whole team didn’t operated to do the work, to get out the product and at the end having their ideas validated with customers during and before development.