Top reasons why startups fail
3 min readJan 31, 2018
- No market need
Startups succeed because they are solving a particular problem users are experiencing. People might think: Uh this market is too saturated, I shouldn’t be there, I should take on some less saturated market. Market is usually saturated because there is a need for that product on that market so there are a lot of potential users there. - Burn rate
Money rules everything around me. Startups can run out of cash not only when they are underfunded, but when they receive too much and don’t know what to do with it exactly. - Wrong team
In order to increase your chances of success you need to find the right people for your team who are experts at what they do. Also lack of motivation or common vision also contribute to startup’s failure. - Strong competition
If startups don’t react to the market fast enough and if they don’t adjust someone else will come and do things better and faster. - Costly products
Sometimes startups create great but expensive product with wrong business model which leads them to failure. You have to consider targeted location and audience. Maybe someone can’t afford your product or you should find another business model. - Bad product
If your app is too buggy, hard to understand, especially complicated, people won’t use it. You have up to 30 seconds to capture user’s attention. - No business model
Ok, you have a great product, cool team and funding. But how do you plan to earn money? You can’t live on funding for the rest of your life. Some startups figure it out, some don’t. - Poor marketing
It’s cool to build an app, but how will people hear about it? Get out and promote your product otherwise you’re building it all for yourself. - Ignoring user’s feedback
Don’t think you know everything. Don’t think you know what’s best for your users. They know what they need and what they want. Listen to them. - Product mistimed
Launching too quickly or too slowly may be fatal. Maybe your product is ahead of its time but it doesn’t mean it’s gonna succeed. Hitting the right time is crucial. - Losing focus
Changing your opinion, vision and ideas too often is usually not good. It’s good to pivot but if you do it too often it means you don’t know exactly what you want. - Disharmony on team/investors
Find good team but also find good investors. If you don’t get along with them, you won’t go far. It will drag you down each step of the way. - Not pivoting the right way
Like I said, it’s good to pivot, but if you pivot in the wrong way you’ll probably lead the whole company in the wrong direction and you won’t be able to adapt. - Lack of passion
Passion and enthusiasm go down over time and they might be lost. If you don’t get any results over time passion will be lost, but also don’t let it go way up because you might lose touch with the reality. - Bad location
Do I have to say anything else. Imagine building your startup in the USA and doing it in Croatia. Croatia? Where’s that… - No investor interest
Lack of investor interest may indicate that your startup has small business potential. Can you prove them wrong? - Legal challenges
Not much of a reason for failure, but issues may arise when a startup starts growing into different fields or markets. Think of Uber and China. - Not using networks or mentors
Use your network to spread the word about your product. Most importantly use advisers and mentors to get some feedback and to avoid making some big mistakes. - Burnout
Startup founders often have poor work-life balance causing them to burn out. You need to rest, do sports, play some games. Too much of anything is not good for human being. - Failure to pivot
You can pivot, but also you can pivot in wrong direction. Not pivoting (because of your stubbornness or unwillingness to admit a mistake) at all could be even worse.
