5 common reasons why startups fail?

Why Start-Ups Fail?

There are times you get stuck and don’t know how to move forward. You tried everything(according to your understanding) but nothing worked out for you. You invested a lot of money on media ads but that as well could not fetch you any significant results. Do you think your marketing strategy was wrong? Or you did not have the right sales team in place? Has the blame game already started? You Mr Founder who are you pointing fingers at?

Stop the crap and let’s get back to the whiteboard. Blaming others for failures would lead you in other holes of darkness. So stop it, and let’s find out what actually went wrong by simply reverse engineering what you did.

The last thing you need to blame is “Marketing” because you as a brand or a business can never be completely dependent on marketing tactics. The product & brand together should be so powerful you would have just needed the marketing to spread the word. So, I am going to list 5 reasons that entrepreneurs ignore in the first place which eventually leads to failures and closure of the business. Let’s find out.

1) Hiring a Wrong Team in the Initial Days of the Startup

The reason why startup fails? For a startup, the right team is as important as developing the right product. You need to find the first few members of your team, ready to shed blood, sweat and tear for your vision. If you have found one, amazing. But if not you are losing a lot of potentials.

What startups usually do? They think of hiring people instead of getting them onboard as co-founders. One it makes you pour in a lot of money second you don’t get the kind of work you could have achieved through a co-founder.

Another mistake that a startup does is to hire freshers for your most critical days. Well, I am not saying freshers are not talented but there is a great need in the early days of a startup to have experienced leaders who can make sure they are on the right path.

2) Procrastination

The young guns think that they are hustling day and night whereas most of these startup junkies are only procrastinating and not building anything at all. (I am gonna write a full post on this topic but let’s try to understand this in brief here)

Reading startup articles, reading startup stories, watching Shark Tank series and discussing the same with colleagues during work hours is nothing but a waste of time and pure procrastination.  You can’t build a product by only reading articles and browsing through Instagram Quotes. You need to take actions and bring results.

In initial days, startups fail to have deadlines as they are busy procrastinating and think they are hustling. As a result, it delays their launch, it creates a bad impression on customers and ultimately they end up selling to no one.

3) No Focus on Sales & Profitability

If you don’t trust me that is okay, but I can give you a reference of thousands of successful entrepreneurs who have said it loud and clear over and over again to focus on “Sales”. If you want to build a product that will make you millions or want to sell a service that will attract a huge number of customers, you need to focus on sales from the day one of your operations. if you want to know more about sales & Profitability please go through my Blog The Most important Sales Checklist for every Entrepreneur! A lot of entrepreneurs those who come to us have this common mistake of not having a sales team or a salesperson. Most of the times even the entrepreneurs are not ready to do the sales!!! Can you believe it?

The ideal way to succeed for a startup is to have the core focus on sales strategy. How are you going to solve a problem and how will you monetize that is the key to success. And focus on selling your solution will keep you in the business. If you will focus only on the product, you might lose a lot of potential customers during the period of development and testing. Start selling even before the product is ready. Yes, you heard it right. You will have a clear idea of whether it will sell or not, what people actually want and you will have the first share of your customers before the launch. It is always good to do a pre-launch campaign with an offer that can attract customers. Hire a good partner who can help you with your sales strategy from day one of your operations.

4) Building Multiple Products even before 1 is successful

If you are a product company and trying to sell multiple products, I can understand. But if you are a startup and haven’t launched a single product yet and focusing on multiple, you are wasting precious days of your life. It won’t come back trust me.

Simply cut all the crap and focus on 1 thing, build it, launch it, scale it and then move to the next one. If you try to focus on building multiple businesses together the chances of failures will increase by 10x or 20x. It is always better to have one thing to make its mark in the market, give you a name and brand, then moving to the next will help you further grow your business.

I am not saying to not diversify your sources of income, if you are into development taking the training over the weekend, that is okay. But do it only if you need it, either for money or to fetch clients. But don’t get into anything else you can survive while you are working on your product. Once you have reached a point where your services or products are scaling and your middle management can handle the business, start looking for something else or look for growth opportunities in the same business.

5) Wrong Approach Towards Branding & Marketing

Most of the startups consider visual design as their brand and going out everywhere is marketing. Well, in this short blog I am not going to explain what a brand is and what marketing actually means, however, I will try to point out to the wrong approach we take and what should be the corrective way.

When it comes to brand building, it is about creating values, having solid reasons of your existence, building an amazing culture, following proven processes that are driven by data, and building your brand strategy accordingly. The visual identity is a part of branding which as well is very important. However, as a startup, the focus should be on building core values and culture within the company that would eventually reflect in your products and services.

Let’s dig more on the wrong perception of marketing?

Marketing is not about creating an ad and distributing it online and offline all the places. You need to have a solid marketing strategy to help your business grow. The first thing is to have clear objectives, align those objectives with measurable results/KPIs. Understanding your market segment, benchmarking your competition, looking at what worked for others and what made others fail, creating a communication strategy, deciding core pillars of communication and having a yearly plan. If you are not doing it, you can’t blame anyone for the failure of your marketing but yourself. So it’s better to strategize first and then give it to your subordinates to execute the same or hire an agency for that reason.

We all have made mistakes and keep doing it every day. I am sure we can relate to at least one of these mistakes and surely have done one in the course of being an entrepreneur. Entrepreneurship is really a tough path and we need to be extra careful to avoid every possible mistake we can do.


If you feel, the article was worth reading, share it with other fellow entrepreneurs too and have a discussion with them on how to avoid these mistakes. Feel free to drop your suggestions and feedbacks in the comments below, I look forward to hearing from you.


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