Let’s Talk About Why Startups Fail
I’ll give you a minute to think why most, or 90% of startups fail, and honestly, that number’s wild. Let’s break it down. Here’s what I gathered with my extensive research (aka meticulous googling): around 90% of the startups fail, and most of them don’t even come close to taking off. Why? You might ask, because it’s brutal out here, yes, that’s an Olivia Rodrigo reference. Anyways, there are several competitors out there, and it’s not easy to survive with just a dream; you need resources to rank at the top. So, sharks here are some small yet helpful reasons and tips to make your startup take off.
The Alarming Statistics Behind Why Startups Fail
Startup Failure Rates
According to a post on LinkedIn, almost 80% of startups crash and die, and let’s not talk about the remaining 10% of those poor souls who don’t even make it till a year. Because there are plenty of fish in the sea, consumers like to switch for funzies. For instance, an iPhone user is most likely to switch to Samsung because of the bare yourselves “ridiculous innovations”, I mean, who needed a camera control panel on the side of their phone? A fingerprint sensor would’ve been a better option for innovation. The takeaway here is innovation and the lack of it, which is why startups fail.
As reported by IBM, most startups fail due to a lack of innovation. A major reason why people don’t opt for brands is that they are bored with the same old products without a single new feature in them, or the product being simply useless. I can’t sugarcoat the real facts.
5 Reasons Why Startups Fail
1. Lack of Market Need – Why Startups Fail Before Even Launching?
According to Forbes, 42% of startups fail due to the lack no market demand products they create. I mean, who’ll buy or use something that is which isn’t tangible for a long time? A great example of this is Frankly Me, a Q&A social platform that targeted Indian users in particular, where people could directly connect to public figures to ask them questions. Questions with the most upvotes had the most chance of being seen and replied to by celebrities.
However, due to no funding and not being able to reach the target audience. In comparison, a Korean app, Bubble, does the exact same thing, but to keep it in the trend, they charge a certain amount to the user to maintain its integrity and the celebrity’s comfort, highlighting a common reason why startups fail.
2. Insufficient Market Research
Less or insufficient market research always leads to the company’s fall. Lays, for instance, when they came to India, they didn’t have the “India’s Magic Masala” flavor. They did intensive market research to come up with a flavor that would resonate with the Indian taste. We Indians love spices, and that’s the key detail Lays caught on to set its feet in the market. Now, imagine if there were no Blue Lays at all. Would you still choose Lays? I know I won’t. This is another reason for startup failure.
3. Poor Timing
Launching too early means no audience, and launching too late means a saturated audience. The big question is how to choose the correct timing. A great example is Apple, which always launches new phones at either the mid or early start of the year. Why? Because that’s when people get an appraisal or a bonus. What better way to snatch people’s money than with tiny new features, right? Now that’s wicked. Choosing the correct timing is hard but not impossible often contributes to why startups fail.
3. Lack of Innovation
Failure in innovation is fatal, and if the startup is lacking in that area, then there’s no saving from it. In the fast-paced world, innovation is a demand; it’s a basic need for startups to grow. This is the reason why 90% of the startups fail. Innovation can come from the smallest things like Pinterest’s founder didn’t wake up with the idea of the app, he saw his wife collecting flowers, magazine cutouts, and whatnot, she had a hobby of collecting pins and making mood boards. That’s where the idea of Pinterest came from. Pinterest = Pin Your Interest.
4. Wrong Passion
Chasing money instead of purpose? That’s one way to lose your startup. Chasing money is fast for sure, but is it worth it if you are on a completely different path than you started with? If the original purpose is lost, then the outcome will be different than the initial vision. Chasing money is good, but only when the initial vision is coming closer, which directly impacts why startups fail.
Strategies to Avoid Failure and Achieve Success
These points are contradictory to the above ones. Above, I told you the reasons why startups fail; now I’ll tell you how to overcome those startup failures.
1. Conduct Thorough Market Research
Not knowing what your customer wants is a major setback to overcome, and you need to conduct thorough market research related to the product, target audience, and market trends. Otherwise, who are you even putting all those efforts into?
2. Focus on Innovation
Innovation is a major key to taking your startup from zero to people’s first choice. It shows how the people working behind the scenes are putting in extreme efforts and coming up with mindblowing solutions to stand out in the market for a long time, and will only grow further.
3. Build a Strong Team
Working alone is tiresome and time-consuming; having a great team to divide the task into small tasks makes it easier and fun to work, and creates new ideas, with more than one brain at work. New startup founders tend to opt for Gen Z because they are the new generation with a great grasp of things that millennials don’t. And once you’ve built that foundation, team, product, and strategy. Some Indian startups are already looking toward their next big leap and gearing up for IPO launches.
4. Develop a Minimum Viable Product (MVP)
Instead of investing months to create a polished product no one’s asked for, launching the simplest version that actually solves a core pain point is what attracts the audience. Think of it as a learning instrument, not a finished product. This will entice the target audience to follow the updates and provide insights to the developers.
5. Cultivate the Right Passion
Not chasing the right person is also one of the reasons why startups fail. To prevent that, chasing the right person is the right thing to do. I also failed in my startup because I couldn’t find the right person for the right job. So, take your time, and keep looking for the right person for that specific job.
Don’t Be Part of Why Startups Fail
To conclude the whole thing, we covered the reasons why startups and you can recover from it, or bypass the failure part altogether by following the tips. In the end, it’s up to you how you proceed with your startup; you can either be a part of the failing 90% or become the next big thing. Best of luck.
Until we meet next, scroll!
