Startups have been the hyped-up success story of the past decade, with a few new companies not just hitting it big, but changing the face of business in the process. But for every successful startup, countless others fail, sometimes mysteriously and often unnoticed.
A major reason why companies fail, is that they run into the problem of there being little or no market for the product that they have built.
We often hear about startup entrepreneurs lamenting their lack of network or investor connections so we were surprised to see that one of the reasons for failure was entrepreneurs who said they did not properly utilize their own network.
Sometimes a startup can evolve from a simple idea to a world of legal complexities that can prove to be a core cause of shutting down.
So here are some reasons why most startup fails:
The market timing is wrong. You could be ahead of your market by a few years, and they are not ready for your particular solution at this stage.
Business Model Failure
entrepreneurs are too optimistic about how easy it will be to acquire customers. They assume that because they will build an interesting web site, product, or service, that customers will beat a path to their door.
Poor Management Team
An incredibly common problem that causes startups to fail is a weak management team. A good management team will be smart enough to avoid above Reasons. Weak management teams make mistakes in multiple areas
Running out of Cash
A fourth major reason that startups fail is because they ran out of cash.
Another reason that companies fail is because they fail to develop a product that meets the market need. This can either be due to simple execution. Or it can be a far more strategic problem, which is a failure to achieve Product/Market fit.
To sum it all, “Startups fail when they are not solving a market problem. We were not solving a large enough problem that we could universally serve with a scalable solution. We had great technology, great data on shopping behavior, great reputation as a leader, great expertise, great advisors, etc, but what we didn’t have was technology or business model that solved a pain point in a scalable way.”
So now What Should be Done to Avoid Them? No idea! visit here.