Most Startup founders and entrepreneurs think that they are creating the next big revolution in the respective industry. However, in reality, 90% of them fail. The motives for failure could be many reaching from lack of product-market appropriate to inadequate capital. Be it a corporation, start-up, investor, academic or economic development person or journalist, everyone will be keen on gaining some insights into the reasons behind the failure of startups. We have curated a list of reasons behind the failure of startups. We have curated a list of reasons behind the failure of startups. These can help potential entrepreneurs avoid the chances of failure.
1. Lack of market demand
Startups flop when they do not explain a surviving market problem. Most companies believe that their invention is quire appealing and there will be a huge demand for their products and solutions. If the creation fails to create demand due to low market demand, then the company will face collapse.
2. Disharmony in the team
A diverse team with various skillsets is very critical for the success of a company. Numerous creators cannot do what is compulsory for a trade to turn successful. Both the founder and the team should attention on industries connected to their services and academic Contextual. The skills they possess should be complemented by that of the team. Disharmony in the team might not health the business take off. Sometimes, there can be disharmony among investors of a company that might also result in a failure.
3. Insufficient funds
Startups need sufficient time and money to operate smoothly. But there is no answer to how much money one needs to spend on the business. Many startups fail due to insufficient funds. Also, many companies fail to raise additional funding.
4. Worry about competition
It is common for any business to face a lot of competition from rivals. However, startups should not pay too much devotion to the competition. It doesn’t mean that corporations should not concern about competition, but it should not be to a great amount. There should be a balance between concern and ignorance.
5. Expensive pricing
The pricing of the product should be appropriate for the success of a startup. If creation is priced too exclusive, then the product might flop to bring in clients to make it successful. It can be high only if there is a benefit for the customer and if makes real sense. In that case, customers do not complain about the product’s pricing.
6. Ignoring customer’s need
It is vital for a startup to come up with products and solutions that customers need. Be it intentionally or accidentally, the team should not ignore the customer’s needs. Getting responses from operators from time to time across periods of product development and testing does not let a company dejected. It will in-fact get customers hooked on to the development of the products and solution.
7. Lack of a business model
Many times, entrepreneurs believe that is easy to build a product, service, or website and acquire customers. However, it is not too easy to achieve without an effective business model. A business model focuses on figuring out a scalable way to acquire customers and monetize customers.