What are the Reasons Behind Startup Failure?
When starting a business, the last thing you want to think about is startup failure. But this is something to keep in mind in any case. Someone has once said that if you fail to plan, then you plan to fail.
This is so true especially in regards to starting a business. Actually, there are many other reasons why startups fail. Sometimes it is bad planning, other times it is incompetence or lack of enough effort.
Also, it’s OK to make mistakes, even pretty stupid ones. But it’s important to learn from them and to be able to change quickly. Thus, in this article, we will look at the reasons why startups fail and will try to find ideas to avoid failure.
A product that is not for the target market
If you are making a product that no one wants, then why make it? You are spending the time to create a product. That’s good. Then also spend the time to conduct proper market research to identify your target market. Maybe there is nearly no one who would like to buy the product you offer. A proper market research will help you understand whether there is demand for your product or not. If there is none, why torture yourself? Gather your team, and think about another product you can offer.
Weak leadership skills of top management
The team is another key factor in achieving success for your startup. And by a team, I mean everyone from your junior specialists to top managers and of course, you, as a founder or CEO. If your management team lacks adequate leadership and decision-making skills, I am sorry but you are very likely to experience startup failure.
Following are a few things you can do to be a better leader:
- Work on your self-development
- Try to overcome anger issues
- Try to know and understand your people
- Whatever you do, work hard on it
- Do your research; investigate what a leader should be like
Not communicating well within the team
This mistake is closely connected with the previous one, for only good leaders can also be talented communicators. Lack of adequate communication might easily ruin a business. The thing is that within a company, several roles and responsibilities might overlap. So, one should not ignore the business process and the possible issues that might arise.
Whether you carry out the communication through email, or a project management tool, or business chat, or face to face, you should ensure that all your people are involved. You need the big picture to lead them successfully, they need the big picture to get engaged and motivated.
Not establishing a deep dialogue with customers
A great product, a cool team, badass managers are not enough to achieve success as a startup. You also need to be careful with the changing market requirements and customer behavior. One more reason behind startup failure is not establishing a proper dialogue with customers. User/customer experience must be one of your top priorities. Your startup cannot be based on a single bright idea; you need to reshape and improve it through time. And you can only reshape it successfully if you take into account your customer feedback and develop it into an action plan to improve the product.
If you are making one or several of these mistakes, then this article could be a good dose of reality for you. Look at the cold statistics of startup failure to see approximately where your startup stands and what challenges you might face in the near future. This is not to scare you; this is rather a friendly reminder to get more organized and to start planning well. Let us know what you think about this in the comments below.