Saturday, November 16, 2019

Top 10 Reasons Startups Fail and How to Avoid Them | AIB

You have to accept that any entrepreneurial venture has a risk. But how can you reduce the risk of failure? Usually, enterprising people draw on the experience and knowledge of others to learn the lessons of their failures and shorten the learning curve for themselves. It takes time to learn how to launch a successful company and all too often, that success is learned through the failures of the companies you have before you.

So, why do they fail? To better understand all this I found interesting and the reason for this post. We evaluate your start-up efforts to ensure that you are not falling into one of the pitfalls or failures in which many startups end. There is no exact formula for the success or failure of a startup, but there are some reasons that could contribute to the company not achieving the expected results.

Here are some of the most important ones:

1) Lack of flexibility

Startups Failure

Although a business starts with a clear objective and with a vision of what the company wants to be, that does not mean that these criteria are invariable. Different situations can generate a need for changes, and those who cannot make them could be left behind. A startup has to be ready to adapt.

Advice: Do not be stubborn. No plan is written in stone. If something happens that changes the direction your company was running, it does not have to be a bad thing. Take it as an opportunity to reinvent yourself.

2) Lack of resources

Startups Failure

It’s not just about money; you should consider the staff and the time too. If it is not possible to assemble all these elements, progress in the development and growth of startup could become a slow process that would end in disaster if competing companies move forward. It also becomes a problem if, despite having all the resources, not handled correctly.

Advice: Take an inventory of all your resources and make sure you give them the best possible use. Even if there is little they have, and especially for that, nothing should be wasted. Also, the members of the company must be delivered to the project and make it happen.

3) Lack of promotion

We can have the best idea in the world, but it does not help if we are the only ones who understand it. And if they do not understand the meaning of the product, then we are in serious trouble because nobody will want to buy it.

Advice: To make ourselves understood by the public, we have to know it. A study of who we are going to give us a better idea of ​​how to make them reach our message in a better way.

4) Lack of confidence

It may be that the members of the company do not really believe in what they try to sell to others. If that fails, the motivation is nonexistent, and the response of the public lacks emotion, as well as that of the workers.

Advice: Do not be part of any project that you do not believe in. Make sure everyone in the company has the same commitment to the goals they pursue.

5) Lack of solidity in the team

A company can have objectives and an excellent strategic plan, but it depends on the team to carry it out in such a way that the goals that have been set are sufficed. If there is no good coupling, frictions could arise and reach an unsustainable point.

Advice: It is impossible to find a workgroup that shares the same character or interests, let alone the same skills. It is necessary to make an assessment of each one and see how they can better enhance their capabilities to, together, achieve higher performance.

6) Lack of strategy

The enthusiasm to start a new business can lead to actions being developed in a hurry and without a criterion that can lead to success. It is necessary to structure the people who work in the startup and also the development of the actions to follow.

Advice: Do not rush or get carried away easily by the enthusiasm of the beginning. It is not a matter of going crazy, but of taking each step thinking of the next, with awareness and dedication.

7) Lack of focus on consumers

It is normal to have the idea or hope to create a product that is useful to all but to improve company it is necessary to have a clear segment of people that will be our objective. Searching to please everyone will only generate more stress and wasted energy.

Advice: Do not try to cover more than you can. It is better to leave your chosen group of users completely satisfied and not try to satisfy everyone and leave the majority disenchanted.

8) Excessive resources

Is this a problem? Someone might think. Having too much money could be as harmful as not having it. With the entry of more money, changes come, and these are not always for the better. The work atmosphere can change, people, goals and maybe not everything feels as comfortable as at the beginning of the project. And that would have a strong consequence in the continuation of a startup in the market.

Advice: It’s all about knowing how to manage well. According to money in the company, it will be necessary to make decisions for your investment. Do not let yourself be rushed and only make the investments that will contribute to an improvement in the service or the product.

9) Lack of commitment to carry out an idea


Many of us can have references to the big falls of startups, but we never heard the real problems of their failures. If it is wrong to make mistakes that lead to the collapse of the company, it is worse to reach fault for not doing anything. Those businesses that do not take risks and only wait for their excellent idea to come true are not ready to compete in the market, let alone be victorious in it.

Advice: Success does not come along. It is necessary to get dirty hands struggling and working hard to reach it.

10) Earnings before customers

Making money from the idea of a startup is undoubtedly something important. Even if we do not consider it necessary to be rich, the sustainability of the company depends on us being able to make enough money to keep us up, at least. However, something more important is to focus on providing a good service to users responding directly to their needs. And in fact, these are not two exclusive aspects. When seeking to satisfy the user above all, without neglecting of course that the business remains profitable, the effect will no doubt be seen in the profits.

Advice: The public can notice when a company does not care about anything other than money. Demonstrate the value of your company by responding to the needs of your customers, and making them the center of your strategy.


In sum, many factors may be related to the failure of a startup. Some say it’s about luck, but that’s just the easiest answer to give, and the one that omits the shortcomings in the operation of a company and its members. Some problems may arise along the way, and we cannot avoid it because it is out of our control, but if everything that depends on us is in order, there is no reason to fear failure.

1 Comment

  1. Based on my 5 years of experience I found that startups fail because of no proper leadership and lack of communication between staffs. However it can be fixed with meetings and arrangements, but that needs to be done by anyone.

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