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15 Surprising Reasons Why
Startups Fail

2.
Cloudswave The trusted place for
software selection
https://www.cloudswave.com

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It starts with a simple question

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What are the top reasons why startups
fail?

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Reason 1 Lack of consumer interest

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90% of the time, Internet startups fail
because of their inability to acquire
and retain a substantial number of
users.

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“The market simply isn’t there.”

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“Build it and they will come"

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"Build it and they will come" is one
major myth that has long been
debunked.

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No matter how great you think your
product or service is

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without consumer interest

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without consumer interest, without
enough people willing to pay you for it,

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your business will soon die a natural
death.

14.
proven way to combat this, is
validating your idea before plunging
into the startup game head-on.

15.
Reseon 2 Bad (or ill-timed) product

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“Most ideas are bad,”

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entrepreneurs gamble on hunches

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and therefore, the proliferation of
misguided ideas.

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We all know what happens with
products borne out of bad ideas

20.
there are startups that got into the
game ahead of their time.

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"being early is the same as being
wrong."

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Reseon 3 Not having the right team

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in the early days of a startup, there is
no product.

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what you have are a vision

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and a team.

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if the members of your team are not
equipped with the right tools, skills,
and mindset to bring your vision to
fruition,

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the likelihood of your startup gaining
traction is minimal.

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Remember, ideas are a dime a dozen.

29.
It’s execution that carries far more
weight.

30.
Reason 4 Running out of money

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imagine not having the financial
means to pay the people who work for
you.

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the number one reason for startup
failure is lack of funds.

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running out of money as a “real
momentum killer.”

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Reason 5 Stiff competition

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when startups enter the market

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they’re confronted with two types of
competition

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direct and indirect.

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Direct competitors offer the same
product or service, market to the same
geographical area, or use the same
distribution channel.

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product or service but operate in a
different geographical area. Others
offer a completely different product or
service for the same need your startup
addresses.

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Reason 6 Disharmony

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36% of startup founders cited egotism
as the reason their startups failed,

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13% pointing to team or investor
discord as the culprit.

43.
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44.
Reason 7 Bad business model

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most failed business owners stop
planning at the concept stage

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The business plan should include
details like operations, financial
forecasting, funding, ramp-up, and
logistics, among others.

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Reason 8 Poor marketing

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to recognize the value of a brand,
product, or service, engage with a
target audience, showcase industry
expertise, and boost revenues.

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In the case of failed startups:

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They fail to hire the right people to do
the marketing for them.

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The distinctive competencies of their
offering have not been clearly
established. Neither is their
positioning.

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Not much user traction, therefore, not
much word-of-mouth marketing.

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The marketing strategy doesn’t fit.

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leveraging your happy customers
should come right after positioning
and targeting.

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Reason 9 Loss of focus

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In the beginning are unbridled
enthusiasm and a lone vision fueling
many sleepless nights

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as time flies by, some startups lose
their focus.

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the reasons contributing to this
scenario include:

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Too much passion

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Too many visions

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Investor expectations

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Rapidly evolving technology,
regulations, and political climate

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Reason 10 Burnout

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Burnout can happen to anyone

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startup founders, after pouring all
their time and energy into building
their company from the ground up

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are especially prone to it

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Reason 11 Failure to change tack when
faced with a roadblock

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One essential trait startup leaders
must possess

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is the ability to regroup, tweak, or
even change their business model
midstream.

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in a constantly changing business
landscape,

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flexibility is a winning startup
characteristic.

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Reason 12 Pricing vs. cost issues

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When it comes to pricing your product
or service

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it’s a matter of finding just the right
balance

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Price it too low and, after expenses,
you may not even earn a decent
income.

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Price it too high and you may turn
people away.

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“Without the related marketing, low
price just sets low expectations.”

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Reason 13 Bad location

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For businesses with brick-and-mortar
locations, this doesn’t need much
explanation.

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For Internet-based startups, your
office location matters.

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You’d want to set up shop in an area
with the most talents, investors, and
mentors.

82.
If you work with remote workers from
varying time zones

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an effective communication and
collaboration strategy is an imperative.

84.
Reason 14 No investor interest

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“You raise too little and you’re always
chasing the next bridge loan or
funding rounds to take your company
to the next half-step.”

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No cash, no investor interest – it’s not
rocket science, really.

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When there’s nothing left to spend
and no funding to turn to

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business failure becomes imminent.

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Reason 15 Expanding too soon

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“premature scaling,” is a situation
when high-growth companies expand
way before they’re ready.

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This can come in the form of hiring too
many employees

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or raising the marketing budget before
sustainable revenue is established.

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Premature scaling is often a byproduct
of the founders’ overzealous
optimism.

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Nobody ever said that running a
business is easy

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let alone starting one from scratch.

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failure can happen to anyone

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you don’t have to reinvent the wheel

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this presentation aims to help you do
just that.

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The End