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Reasons of Startups Failure & Ways to Build Better Business

A large number of new businesses start every year and more than half of these startups shut their doors in the same period. If a report is to be believed, the failure rate of new tech startups is around 90% and this is the result of the first 120 days. There are numerous reasons why a newly established ¬†firm misses a target and to attain success it is very important for an entrepreneur to prevent failures before it’s too late.

Reasons for Startups Failure & Solutions

Improper Final Product and satisfying User’s Need

Satisfied consumers are very important for the success of a business and in most of the cases, it is seen that companies are not aware of their customers. A good startup should start with identifying prospective customers. Define your target audience audience and validate the market’s response on the product.

Poor Attention and Carefully checking the Process

During the initial stage, the constant fight is to simply stay afloat. You will find that things come to you rapidly and completing them quickly is your top priority and forget to focus on the process. In fact, it is very important as you can easily tackle business issues. In addition, the methods which you have put in the process can tell the overall direction your business is taking. Hence, have a look at the process without fail.

Insufficient Funds and having knowledge of capital required

To most newly established firms, getting funded is a difficult task, but some capital is usually provided by the angel investors. In this regard, find out how much capital is required. You should calculate it and also represent the financial risk against the potential benefit that you are foreseeing. Moreover, you should be realistic about your product and also about the scope of work to bring it to the table and be rational about the amount of money you have and how would you spend a fortune.

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Complex Idea and technologically sound concept

Many entrepreneurs think that when they have a massively popular product, which was testified by MVP, then their startups can never fail. However, this is not true and thus, complete detection of the technical risks such as the performance of a product or its ability to integrate with existing products as well as the systems. Furthermore, a meeting with technical experts should be done before launching a startup. This is because reduction of risks through advanced planning with clear objectives, technological complexity and scope of work plays a vital role in increasing the chances of your newly established firm.

Ineffective Management Team and forming properly

When the team is not good, then all the members will be often weak on strategy, building a product that is required and in validating the ideas before as well as during the development. Such team is generally poor at execution and this is the major reason for the occurrence of issues with the product not getting developed in the correct way within stipulated timeframe. In addition, go-to market execution will also be poorly implemented. This means that it is very important to look at the right people and pay attention on building your team from the beginning.

Wrapping Up

These are some of the reasons behind the failure of a startup. Therefore, you should pay some attention to all these above-mentioned issues as well as their solutions. This way you can achieve the desired goals which are important for the success of a business.


Jennifer Brody

Jennifer Brody is a SEO expert who help companies in building their businesses as well as in attracting new customers through web traffic. Apart from this, she has extensive experience in writing about mobile apps and all new technologies after doing thorough research.