Why Do Startups Fail?

Why Do Startups Fail?

The decision to quit your job and start a business is simultaneously the bravest and the most reckless thing you’ll ever do. Because why would you want to rid yourself of job security, and the consistent monthly paycheck that comes with it and chose to be in a dome of uncertainty instead?

Here’s why.

  • You have an amazing idea for a business
  • You want to be your own boss
  • You want to use your full potential

The thing with starting a new business is that 90% of them fail within the first year of their existence. So before you go on and set take the initiative, it might do you some good to know why startups fail in the first place.

The Idea is Not Tangible Enough

The entrepreneur might have a great concept, but it’s of no use if it doesn’t translate into a sellable product or service. For example, ‘a place where teenagers can throw paint each other’ may not be the best pitch to an investor. You’ve got to think of your business in sizeable terms and make the pitch accordingly.

No Built-in Audience

An entrepreneur, by definition, is someone who recognizes a gap in the market and seizes the opportunity to reap the maximum benefits from the minimum investment. Recognizing an existing need is what builds your audience. And this is what a lot of entrepreneurs forget when developing a product. Who are your users going to be? Why would they even use your product?

Premature Scaling

Startup Genome thinks that many startups fail because their runners incorrectly scales one of the five essential dimensions for growth. Take a closer look…

Why startups fail? Via Startup Genome

No Foreseeable Growth

Investors will never be interested in a business that has no potential for growth in the future. Business with niche markets with the most unique of products would want to think ‘what next?’, ‘what more can be done?’ If your idea is instantaneous but stagnant, your business might be the one that fails within the year.

No Team

Here’s another thing when you’re starting a business—you think you can do it all. Building an enterprise on your own blindsides you to some obvious, fatal flaws that you can’t see because you’re too embedded in the preparation. You need to build a team that would provide an outsiders insight, widen your pool of ideas and chime in with corrections when needed.

Above all, think of starting a new business through Heisenberg’s window. You simple don’t have absolute control because of the Uncertainly Principle. There will always be a position x or a momentum p that you will never be able to fully arrogate through empirical means. Still, the more you can get things under your control, the more likely your startup is to succeed.


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