startup

9 Authentic reasons why startup fails normally:

Failing a startup is common however, why the rate of failure is consistently high? Every start up is unique and its problems are also unique. I would like to list few common problems in this article why Startup Fails normally?

1.Losing focus:

Generally, travelling on a bumpy road is risky and tiresome. For instance, a long journey where You just know only destiny.

• Don’t know the route how to reach the destiny.
• Don’t have GPS on hand to set the destination and follow.
• Day and night journey on hills.
• No highway, it’s a long bumpy road.

Imagine, how difficult the journey is going to be. It is quite common for anyone to lose the focus at some point of time. However, a big hope + self confidence + patience are the three entrepreneur qualities which should drive to destiny, of course your fuel is equals t funds

Every startup founder and core team member needs lot of energy, motivation and patience as there is no guarantee for success. Consequently, when there is no guarantee, why do we need to start it up? Well, nothing is guaranteed in the life, its just a hope. If the founder lose the hope it effects startup very badly, so losing focus is one of the reasons to fails your startup.

2.Starting very big:

Every mom start feeding her kid with smaller quantity, starts with milk and gradually increases to solid food after 6 months. Why? Because baby’s little digestion system improves gradually. Similarly, I would suggest don’t attempt to implement total idea at one shot for below reasons.

1. Time to market is very important, as long as product gets delayed to hit the market your burn rate will be high with not returns.
2. If you go big you need to burn big. Eventually, if it fails you will end up lose big money either.

Develop a minimum viable product, pitch into the market, understand customer problems, start little revenues, address the problems in the next phase, Enhance with new requirements. This is the right cycle to follow. We usually call it as Lean Model for startups.

3.Ignoring basics:

Stick to basics: I believe in this, what is basic? It is a fundamental behavior. We have basics for mathematics, science, personality, business and startups either. Sticking to basics will keep you on the ground. 

4.Pricing & cost:

Pricing plays vital role in a product success. It should be derived based on customer need, competition, target set of customers and their buying capability and need of your product. If the pricing don’t consider any of these parameters you will end up fixing a wrong tag which leads to a product failure.

5.Market penetration:

Marketing a product is more difficult than developing a product. Though you have right product, If you fail to market, create customer base, letting customer know about your existence, it leads to big disaster. So you need to have strong marketing strategy to penetrate and reach to right set of customers.

6.Right Team:

Setting up a core team is another bigger activity. Finding resources with good attitude and various skill set which the startup demands is a nightmare. Team members which have below qualities would leads your startup to failure.

• Team member with wrong attitude.
• People who have pure employee mindset.
• Lack of honesty.
• Contributing very less time.
• Regular conflict between employees.
• Lack of adaptability.
• Having people who are not capable enough to deliver.

7.Lack of Planning:

To my knowledge planning is tuning your mind to re plan your existing plan. However, lack of basic plan is danger. What is a plan? Plan is combination of reality, assumptions, todo list, projections and risks. When you need plan to execute small project, don’t you think a well defined plan to execute a startup? Unfortunately, lack of planning, wrong business model, wrong business strategy are contributing most startup failures across the globe.

8.Running out of cash:

Running out of cash is a common problem for startup as it is not an existing business to execute. Burn rate will be very high  as you have to build from scratch. If you don’t plan the budget from prototype stage to until product penetration of market, you are in risk. Majority of the times you could raise funds only when your business generate the revenue, this is a bitter truth every entrepreneur should understand as investor expects returns on his investment.

9.Quality of the product:

Every startup founder has to keep one thing in mind, either the product costs one dollar or $1000 customer expects quality. Certainly, no customer would expect $1000 quality for a dollar. Consequently if your product don’t meet minimum requirement of customer, it leads to failure.

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How to turn startup failure into success

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