Top 20 Reasons Why Startups Fail

42% NO MARKET NEED

 Startups succeed because they are solving a particular problem users are experiencing.

29% RUN OUT OF CASH

 Startups can run out of cash not just when they are underfunded, but when they receive too much and spend recklessly.

23% NOT THE RIGHT TEAM

 Lack of motivation, expertise or common vision can all contribute to a startup’s  undoing.

19% GET OUTCOMPETED

 A combination of details, such as expertise, motivation of funding can lead to one startup outcompeting another.

18% PRICING/COST ISSUES

 Some startups develop a great, but costly product, leading to underperformance in sales and revenue.

17% POOR PRODUCT

 If the primary focus of startup founders is not on the product, the end result might be disappointing for the user.

17% NO BUSINESS MODEL

 A great idea is not enough. Founders should have a monetization strategy from the very beginning.

14% POOR MARKETING

 Some founders err by thinking a great product will advertise itself, they market it to the wrong audience or via the wrong channels.

14% IGNORE CUSTOMERS

 Distraction or disputes can take the focus off the customers and their needs.

13% PRODUCT MIS-TIMED

 Launching too quickly or too slowly can be equally detrimental to a startup’s success.

13% LOSE FOCUS 

 Changing visions and ideas can make founders too self-absorbed, causing them to lose focus on the purpose and idea behind the product.

13% DISHARMONY ON TEAM/INVESTORS

 Ignoring investor demands or yielding to them too much can hurt a company. The same is true for tension between co-founders.

10% PIVOT GONE BAD

 If pivoting is not done carefully and based on enough supporting data, it can irreversibly lead the whole company in the wrong direction.

9% LACK OF PASSION

 If founders are interested in a product merely for profit and not because they believe in the idea, they can quickly lose traction.

9% BAD LOCATION 

 Being in a place brimming with talent and ideas can help founders see their startup through. The right place will also have the audience most likely to use the startup’s product.

8% NO FINANCING OR INVESTOR INTEREST

 Lack of financing and investor interest may indicate that an idea has small business potential or that is not presented in a way that captures interest.

8% LEGAL CHALLENGES

 Unexpected legal issues may arise when a startup starts growing into different fields or markets.

8% DON’T USE NETWORK/ADVISORS

 If startup founders do not use the connection of their investors, as well as their own, they may not be able to gain sufficient traction.

8% BURNOUT

 Startup founders often have poor work/life balance and have to juggle between many tasks, causing them to burn out.

7% FAILURE TO PIVOT

 Stubbornness and unwillingness to admit a mistake can be quite costly for startups, disappointing employees  and customers alike.

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