Top 10 Reasons Behind the Failure of Startups


TechsPlace | Every startup when launching believes it is making the next revolutionary product but 90% of them fail. If you don’t want to end up like just one of the other startups that failed after one year of inception, learn from the mistakes of others.

The right approach is to gain some insight into why startups fail. If you’re a budding entrepreneur, avoid these factors below.


1. Mistimed Product Release

Timing is everything. If you launch a product too early and customers end up writing it off, you may not be able to undo this first impression. On the other hand, if you release the product too late, you will miss the window of opportunity. When launching, it’s important to do it at the right time. A mistimed product is doomed to fail.


2. Disharmony Among Founders and Investors

Lack of harmony among founders and investors always takes an ugly turn. If the founders and investors are not on the same page, the company will never be able to use the funds in the best interest of the business.


3. Incompetent Team

A great idea is nothing without a qualified team that makes it happen. A diverse skill set is critical to the success of a company. Don’t be one of those companies that fail to make key hires. Lack of experience and a mismanaged workforce has all the potential to mess things up.


4. Wrong Pricing

When it comes to company success, selecting the right price is an art. It’s a challenge to charge a price that’s high enough to cover the costs while keeping it low enough to attract users – the fact is most customers are loyal because of the Charter Spectrum Internet, for instance!

The problem is, with every start-up, there comes a point when you must assess the company’s long-term viability. You may have created something that your customers adore, scaling into profitability can sometimes be extremely difficult.


5. Strong Competition

The worst advice someone can give you as an entrepreneur is to ignore your competition and do your own thing.

This doesn’t mean you become obsessive with what your competitors are doing and revise your strategy repeatedly. However, don’t lose sight of what’s happening around you. Find a balance between being over concerned and ignorance.


6. Flawed Business Model

Launching a product, acquiring customers, marketing your business, and generating sales is not an easy task. If your business model is flawed, to begin with, you’re on a ship that’s doomed to fail.

The lifetime value of a customer must be greater than the cost of acquiring a customer. Your business model will serve as a base for raising capital, acquiring customers, and becoming financially stable.

The startups with an inviable business model will not be able to bear the cost of acquiring a customer. As a result, the startups will fail in the next few months or years.


7. Legal Issues

Often, when a business gets entangled in legal difficulties, it’s hard to come out. It might be anything from the suspension of a high-profit affiliate account to the inability to launch internationally. Complex legal issues could force you to shut down your business completely.


8. Burn Out

Can a startup fail because its founders burn out? Yes, it can! Burnout has a 5% share in causes of failure. Redirecting your efforts when you see a dead end and having a diverse team that shares all responsibilities is imperative.

It’s a delusion that to succeed you must burn out. Some degree of overwork is involved for sure but hazardous burnout is damaging.


9. No Market Need

Many startups have launched without researching if the product/service they are about to launch has a market need.

Of course, a product without a market need won’t be able to survive. If your product doesn’t solve a problem or meet a need, no one’s going to buy it.


10. Poor Marketing

Marketing to the right audience, using the right channels, and doing it consistently makes your product/service known. A wrong marketing plan could make you fail.



A great business idea won’t take you anywhere unless you have done the research, have a viable business model, and are willing to learn from the mistakes of your predecessors.