Ankita Jagtap Digital Marketing Consultant
SEO & SMO strategist. An avid content writer and an emerging Blogger. Overall, a passionate Digital Marketing Consultant.
Mar 31 2017
Ask any entrepreneur of what his goal is, and the likely answer is to make his business successful and profitable. But did you know that 9 out of 10 startups fall-flat? So, why do these start ups fail?
Maybe if you know the answer to this question, you can avoid the pitfall and be that ‘1’ out of 10.
Here are 5 reasons that led to the failure of many start ups-
1.Market need not satisfied- The first and foremost reason is that the market simply isn’t there yet. It so happens that not enough people know about the product. The people, who know about it, don't understand the product and the people, who understand the product, don't want it.To avoid this, market research before you launch the product to determine the demand or tweaks in the product required to meet the customer’s needs, is very crucial.
2.Funds managed poorly- The second most frequent reason for entrepreneurs failure is running out of cash. Either raising too little money or spending too much or raising a lot of money (yeah! Even that hurts). If you let yourself run out of cash at any point of time, you are dead. Cash is king. Raising a fund that is 80% is not enough; it has to be a 100%.
3.Poor Management Team- An incredibly common problem that causes startups to fail is a weak management team. A great team is not just about selecting a group of smart people; it’s about complementing each other's strengths and mitigating each other's weaknesses.
Divide and conquer is the new rule.
4.Poor business model- one of the most common causes of failure in the startup world is that entrepreneurs are too optimistic about how easy it will be to acquire customers.
Startups fail when they are not solving a market problem. If you make something that users don’t want, then you ‘WILL FAIL’.
They assume that because they will build an interesting web site, product, or service, customers will flock to their doorsteps. Though you should not waste your time in finding the “perfect” model. If you wish to fail, “fail-fast”. So that you can nail another business model.
5.Ignoring competition- if your idea is hot or trending, you can never escape the competition. Don’t be afraid of the competition and never ever ignore it. Where startups go wrong is the belief that they are the only ones with the great idea and going out there without proper competitor research. Ignoring the competition is a recipe for disaster.
Try avoiding these mistakes and be in the top 10% and save your start up from failure.