Why so many startups fail

I’ve worked with over 100 startups in the past years and ran 5 businesses myself.

My experience – in this order: 

No. 1) Weak execution

Most failing startups could just not execute in a timely manner and/or showed a huge lack of judgment. They worked too hard on product features, too little with the market. They built too many “nice to have” features. They did not launch in time and did not work hard enough to build a use/customer base. Didn’t manage expenditures well enough. Failed to identify opportunities, failing to build strategic connection…

No. 2) No long term vision

It’s hard to convince a customer that your young startup is the right business if you just focus on your present product features. It’s hard to convince investors, partners, top talents if you can’t express where you want to take the company. 

As a result you won’t get enough traction and most likely fail.

No. 3) Superficial market/customer research

Lack of product-market fit. Very often startups develop products for themselves instead of for a large market. They keep their development too close to their chest instead of involving test customers very early on – even before they create their first prototype. The result is often to too far off from what the market needs. 

No. 4) Team weakness

No sense of urgency. Not fit enough on the technology side, not fit enough on the marketing side, not fit enough on the finance side, not fit enough on the operational side. 

5) Lack of connection power

Startup teams all too often underestimate the importance of building their own network of influential connections. Connections to influential users, influential industry groups, influential analysts, influential media, influential business alliances… Or they hope to find investors and mentors that provide those connections. In reality it’s just not working that way.

Re- money 

Many comments are made that money is one the problems. In all the cases and startups I’ve seen, lack of money never brought a startup down. Lack of funding is a function of one of the above issues – not a problem in itself. There is more money available than ever before – but the above weaknesses prevent startups to raise funding.

Share
Previous A day of a startup ceo
Next MVP, Minimum Viable Product

About author

You might also like

Investor 0 Comments

Changing the innovation paradigm

Innovation gets funded with billions of $ all across the world. Hundreds of thousands of startups get founded every year. Yet 90% of the inventions, patented ideas, startups and corporate

Share
General 0 Comments

10 different ways to get money for startups

Try to MAKE money before you TAKE money I was recently asked what ways I’d know how to get money to start a company before you really raise money. Except

Share
General 0 Comments

Stop trying to work harder

I was ask what to do to motivate yourself to work harder. I was wondering why on earth you want to work hard. But obviously that is what most people

Share

0 Comments

No Comments Yet!

You can be first to comment this post!

Leave a Reply