Most of the startups fail not because of lack of funds, but because of internal team affairs. I feel this is the main reason why most startups fail before they hit seeding. There are several other reasons for startup failure, but the main one is because of the partners/co-founders/other founding team members, etc. who may not work towards the goal. Let me clear it up.
Every startups’ idea comes from one guy who shares it with other close people [who has same interest], and others just add up the remaining thing [modifications] that is required to make the idea succeed.
“After all, a startup is meant for providing what the other big companies can’t!
So, during the initial stage itself, they want to disrupt the market with their product/service, but end up as a failure. So, what’s it all about –
Startups failure – 5 critical reasons:
1. Startups Fail in the initial stage itself:
During the early stages of production/testing, every member of the startup team works hard to get the product delivered on time. Most of the time, they may not deliver the product on time, the reason can be anything, like false excuses, lack of supervision, etc., This is the first phase of failure. Most of the startups continue to delay the productions and end up as failures during the initial stage of becoming a super-startup.
2. Peers fighting for a considerable role –
This may be silly, but few of the members in the startups usually compete for a significant role and talk in such a way that they are the main reason for the startup idea. This can be seen in startups who seems to be growing in funds wise, but fall in team wise. No startup is a single person play, and it does require a whole team to work towards finishing the projects, so considerable changes will be done in the team resulting in miscommunication, thereby ends up as a failure. Also, the profit share among the team also leads to breaking in team resulting again in a failure.
As already said, reasons are many but the result is one – #Failure
3. The product the startup offering may not have any customer-base in the market
Most startups struggle with this! They believe in their idea and simply starts taking things seriously by launching their startup. But, they may not do any market research before launching their startup to find out if there is any customer base for their products. This seems to be a huge problem, as you can find n number of startups launching with crazy services that may not be needed by an end-user. So, the ultimate result is startup failure.
4. The product with similar features already exists in the market
There are a lot of examples for this reason for startups failure. Most of the business startups think they are the first to start the firm on this idea, but in reality, there might be many startups who might have already launched the product, some might be working on advancing the product with different services. So, the startups with these end up as failures during the first year itself.
5. Using funding for personal use –
This is the most critical reason why most startups fail. It’s a known fact that during pre-startup, founding members may use their own money to grow the idea, but once the startup raises some funding, they will use the investors funding to make the products or for providing the service. This is where the management should have control over spending the funds wisely. But, most startup CEOs uses the funding for their own personal use and thus making the product get delayed, or sometimes the product may not get into production due to the lack of funds. All these things lead to one single thing – Startup failure.
I feel these are the 5 critical reasons why most of the startups fail, and in my next article I will explain what the things should be taken care of before you launch your startup.