why startups fail

Why startups fail?

Startups often fail when they live in a vacuum and then perfect and release a product to the marketplace. Staying focused, wrapped up in their own idea they tend to lose perspective about the outside world. Also startups can fail due to competition. Good ideas are competitive for example MySpace came first but Facebook won over it though it was started in a student’s dorm room. Startups can also fail because humans are fallible and gullible. Anyone can fake, lie, steal, walk out, get tired, and lose their health. Walt Disney didn’t get a job as a newspaper cartoonist because he apparently “lacked imagination and had no good ideas “Startups must never let anyone stop them. Every startup must have a good idea and also a plan of execution to ensure that you won’t fail in the long run. In this article I shall list a few reasons as to why startups fail and what you must avoid in your venture.

product development


Confidence is a good thing but overconfidence isn’t. Overconfidence leads to arrogance which ultimately leads to failure because one fails to notice what’s happening at the market say for example:

  • No demand in the market.
  • Lack / need of a good business model
  • Idea doesn’t solve a big problem.
  • Product mistimed.
  • Competitors who don’t give up easily.

So one must always learn to accept criticism and use it as a stepping stone to grow without becoming defensive over it.

Failure to anticipate things:

Failing to plan is planning to fail. Startups fail due to reasons such as:

  • Running out of cash.
  • No investors.
  • Cost issues.

So startups must maintain some money in the reserve so that you don’t meet a dead end when you come across a road block.

Not paying enough attention:

Many startups believe that building a good product is what’s that’s important and they fail to give importance to sales and marketing. Sadly many startups have failed due to weak marketing or poor planning. The market moves on and it’s difficult to predict what next.

Startups must pay enough attention while hiring marketers and salespeople just as how they will be concerned while they hire an engineer.


Startups involve talented, experienced and young fellas who are specialized in different streams. Building a business isn’t a single man’s job and it requires a team effort. All it takes is one wrong team or one wrong partner to fail your business. Egotism can lead your startup to fail if:

  • There isn’t a right team.
  • Disharmony on the investors.
  • Listening to the wrong people (good advice that could conflict with their ideas)


Sloppiness can affect your brand, it could also make your startup a joke. Every startup must ensure that there aren’t any cracks or loopholes in their business. Sloppiness can cause a startup to fail in these ways:

  • Delivering a poor product.
  • Startup at a bad location.
  • Legal challenges.

Every startup must therefore pay attention to every minute detail to ensure they don’t fail.

Work/life balance:

Often startups tend to push individuals beyond their limits. We all might have read about how an improper balance between work and life could lead to stress and leads to bad decisions. Thus a startup can fail if there isn’t a proper work life balance because it could lead to:

  • Loss of focus.
  • Lack of passion.
  • Inability to make decisions.
  • Stress.

Therefore one must exercise or meditate every single day to ensure that they stay calm no matter what and try to maintain a good work life balance.


One must be flexible and must be willing to accept change, learn from their mistakes, try to see what change could bring a positive result and must go ahead and incorporate the change in themselves. No one can ever move forward by being inflexible, it can cause your startup to fail by:

  • The team being very rigid and not willing to change their methodologies.

So every startup must welcome changes instead of resisting them and see what value it can actually add to the startup.

So this one’s for you guys

startup founders

So what must one do to have a successful business?

Step 1. Deeply understand the problem you are trying to solve and how your product eliminates the same problem for your customers.

Step 2. Find out if there are people who want their problem solved RIGHT AWAY.

Step 3. Build 100 percent of your communication around the problem.

Step 4. Offer ONE piece of free content that demonstrates that you have the solution to their problem.

Step 5. Show them how to reach out to get your help solving the problem.

Other alternatives:

Lean startups methodologycome to the rescue by helping you drive your startup and reduce waste.

Growth hacking is another technique which ensures the success of startups by burning least amount of capital.

Well that’s about it. Please try and understand why startups have failed in the past and how it could affect your startup.  That’s the only way one can learn and avoid a mistake, of course there will be failures which could happen unexpectedly. But by understanding and trying to avoid the main reasons which can cause a failure one can ensure that the life of the startup is long.



At Recro we combine Design Thinking, Lean and Agile to help you achieve market-leading  performance.

We partner with our clients with the aim to transform their business challenges into growth opportunities.