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15 Surprising Reasons Why Startups Fail

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15 Surprising Reasons Why Startups Fail

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What are the top reasons your startup Is doomed to fail? Answers vary and originate mostly from investors and startup founders, people who have come face to face with startup failure at least once in their lives...

What are the top reasons your startup Is doomed to fail? Answers vary and originate mostly from investors and startup founders, people who have come face to face with startup failure at least once in their lives...


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15 Surprising Reasons Why Startups Fail

  1. 1. 15 Surprising Reasons Why Startups Fail
  2. 2. Cloudswave The trusted place for software selection https://www.cloudswave.com
  3. 3. It starts with a simple question
  4. 4. What are the top reasons why startups fail?
  5. 5. Reason 1 Lack of consumer interest
  6. 6. 90% of the time, Internet startups fail because of their inability to acquire and retain a substantial number of users.
  7. 7. “The market simply isn’t there.”
  8. 8. “Build it and they will come"
  9. 9. "Build it and they will come" is one major myth that has long been debunked.
  10. 10. No matter how great you think your product or service is
  11. 11. without consumer interest
  12. 12. without consumer interest, without enough people willing to pay you for it,
  13. 13. your business will soon die a natural death.
  14. 14. proven way to combat this, is validating your idea before plunging into the startup game head-on.
  15. 15. Reseon 2 Bad (or ill-timed) product
  16. 16. “Most ideas are bad,”
  17. 17. entrepreneurs gamble on hunches
  18. 18. and therefore, the proliferation of misguided ideas.
  19. 19. We all know what happens with products borne out of bad ideas
  20. 20. there are startups that got into the game ahead of their time.
  21. 21. "being early is the same as being wrong."
  22. 22. Reseon 3 Not having the right team
  23. 23. in the early days of a startup, there is no product.
  24. 24. what you have are a vision
  25. 25. and a team.
  26. 26. if the members of your team are not equipped with the right tools, skills, and mindset to bring your vision to fruition,
  27. 27. the likelihood of your startup gaining traction is minimal.
  28. 28. Remember, ideas are a dime a dozen.
  29. 29. It’s execution that carries far more weight.
  30. 30. Reason 4 Running out of money
  31. 31. imagine not having the financial means to pay the people who work for you.
  32. 32. the number one reason for startup failure is lack of funds.
  33. 33. running out of money as a “real momentum killer.”
  34. 34. Reason 5 Stiff competition
  35. 35. when startups enter the market
  36. 36. they’re confronted with two types of competition
  37. 37. direct and indirect.
  38. 38. Direct competitors offer the same product or service, market to the same geographical area, or use the same distribution channel.
  39. 39. 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.
  40. 40. Reason 6 Disharmony
  41. 41. 36% of startup founders cited egotism as the reason their startups failed,
  42. 42. 13% pointing to team or investor discord as the culprit.
  43. 43. Top 100 Free Business Software Ebook – Yours Free https://www.cloudswave.com/blog/fr ee-software-ebook/
  44. 44. Reason 7 Bad business model
  45. 45. most failed business owners stop planning at the concept stage
  46. 46. The business plan should include details like operations, financial forecasting, funding, ramp-up, and logistics, among others.
  47. 47. Reason 8 Poor marketing
  48. 48. to recognize the value of a brand, product, or service, engage with a target audience, showcase industry expertise, and boost revenues.
  49. 49. In the case of failed startups:
  50. 50. They fail to hire the right people to do the marketing for them.
  51. 51. The distinctive competencies of their offering have not been clearly established. Neither is their positioning.
  52. 52. Not much user traction, therefore, not much word-of-mouth marketing.
  53. 53. The marketing strategy doesn’t fit.
  54. 54. leveraging your happy customers should come right after positioning and targeting.
  55. 55. Reason 9 Loss of focus
  56. 56. In the beginning are unbridled enthusiasm and a lone vision fueling many sleepless nights
  57. 57. as time flies by, some startups lose their focus.
  58. 58. the reasons contributing to this scenario include:
  59. 59. Too much passion
  60. 60. Too many visions
  61. 61. Investor expectations
  62. 62. Rapidly evolving technology, regulations, and political climate
  63. 63. Reason 10 Burnout
  64. 64. Burnout can happen to anyone
  65. 65. startup founders, after pouring all their time and energy into building their company from the ground up
  66. 66. are especially prone to it
  67. 67. Reason 11 Failure to change tack when faced with a roadblock
  68. 68. One essential trait startup leaders must possess
  69. 69. is the ability to regroup, tweak, or even change their business model midstream.
  70. 70. in a constantly changing business landscape,
  71. 71. flexibility is a winning startup characteristic.
  72. 72. Reason 12 Pricing vs. cost issues
  73. 73. When it comes to pricing your product or service
  74. 74. it’s a matter of finding just the right balance
  75. 75. Price it too low and, after expenses, you may not even earn a decent income.
  76. 76. Price it too high and you may turn people away.
  77. 77. “Without the related marketing, low price just sets low expectations.”
  78. 78. Reason 13 Bad location
  79. 79. For businesses with brick-and-mortar locations, this doesn’t need much explanation.
  80. 80. For Internet-based startups, your office location matters.
  81. 81. You’d want to set up shop in an area with the most talents, investors, and mentors.
  82. 82. If you work with remote workers from varying time zones
  83. 83. an effective communication and collaboration strategy is an imperative.
  84. 84. Reason 14 No investor interest
  85. 85. “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.”
  86. 86. No cash, no investor interest – it’s not rocket science, really.
  87. 87. When there’s nothing left to spend and no funding to turn to
  88. 88. business failure becomes imminent.
  89. 89. Reason 15 Expanding too soon
  90. 90. “premature scaling,” is a situation when high-growth companies expand way before they’re ready.
  91. 91. This can come in the form of hiring too many employees
  92. 92. or raising the marketing budget before sustainable revenue is established.
  93. 93. Premature scaling is often a byproduct of the founders’ overzealous optimism.
  94. 94. Get Exclusive Software coupons https://www.cloudswave.com/softwar e-deals/
  95. 95. Nobody ever said that running a business is easy
  96. 96. let alone starting one from scratch.
  97. 97. failure can happen to anyone
  98. 98. you don’t have to reinvent the wheel
  99. 99. this presentation aims to help you do just that.
  100. 100. The End