Top 5 Fails That Can Happen To Any Startup

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The large majority of startups fails to make it big - or even to stay in business. We'll walk you through 5 of the most common pitfalls so you can avoid them!

The vast majority of those who end up building their own startup consider themselves infallible. That, to some extent, is a good personality trait, since it takes a lot of determination and confidence to start and grow a business. However, it needs to be mentioned that the vast majority of startups are destined to fail.

In this article, we wanted to look into the most common reasons startups end up unsuccessful so that you can identify red flags ahead of time and potentially save your business from dissolution. Let’s dive right in, shall we?

#1 Not Understanding Who Your Clients Are

One essential component of a successful product or service is a proper understanding of what its target market needs and wants. Trying to cater to everybody or a section of the market that is simply too broad will take you nowhere. It is essential that businesses invest the necessary amount of time and effort in market research that will allow them to understand who their ideal client is, what their needs are, and what content they consume.

In effect, this will allow you to calibrate the necessary marketing strategies to speak to your audience, instead of resorting to a spray-and-pray tactic.

#2 Focusing On The Brand Over The Customers

While it is true that a business is all about creating a multifaceted concept, product, or service, business owners will very often dedicate a substantial amount of their focus towards the brand image, rather than concentrating on solving a problem for other people.

Every business is essentially a clever or accessible solution for a common problem people are facing. Instead of continually optimizing your product, so that it has an overwhelming number of features so that customers are compelled to buy it, it essential to concentrate on what the market really needs.

It is, therefore, dangerous to invest excessive amounts of time into building a product “for yourself” and not reaching out to your potential customers to get feedback. It creates a very limited understanding of what your product should end up looking like, which prevents your product from being actually desirable to your target audience.

#3 Too Niche To Be True

Choosing the right niche to operate in a crucial decision every startup needs to make when calibrating their concept. However, business owners will choose to operate in a niche that is too obscure. Sometimes, because they find that it would immediately grant them a customer base, or because there won’t be any competition to deal with at the early stages of development.

A business not having a large enough market will eventually be confronted with a more substantial issue, even if it manages to stay afloat for a year or two — scalability. If your product solves a very local problem for a very limited market, you won’t be able to grow and expand your startup.

#4 Not Having The Right Team

It takes confidence to start a business. However, there’s an important trap founders fall into, due to excessive confidence, which has to do with not having the right team of people around. When a single person makes business decisions, it’s similar to being in a dark tunnel with limited visibility. We tend to believe we understand the world around us, but more often than not — we don’t.

Starting and growing a business on your own is an arduous task. You need talented and versed people to brainstorm with and prevent you from making uninformed decisions that will often drive your startup in a ditch, and by no means least — support you when your spirits are low.

Startup Genome‘s report suggests that founders that choose to develop a startup on their own will generally take over 3.5 times longer to scale their business, more importantly, a team that has the right balance between tech and biz will typically have nearly three times more user growth.

#5 Spending Too Much

There is a thin line between spending too much of your budget and underestimating what your budget needs are in the first place. Today, the most common way of spending too much of your money is by having more personnel than you can handle. The higher the number of your personnel is, the less flexible your business becomes, and more importantly, you fail to use some of that money on more important things.

If you’re looking to minimize your spendings, there is a set of common recommendations you consider. First off, have a minimalistic approach towards staffing your business. If there is a particular thing that you can avoid doing — it’s probably not essential. Secondly, many startups will often choose to save their cash and rather pay (at least some of) their workers in equity. Thirdly, focus on the stuff that matters. If you’re a software startup — focus on people who write your code and will actually market your product. Maybe you don’t need an office manager when you’re a team of six.


The truth is that most startups will fail, and there’s nothing wrong about it. Being persistent is what matters in the long run.

Focus on the people that are your customers, build a product that serves them, and don’t overspend. These issues comprise 50% of all failures. The other half is dark matter, which you’ll have to understand on your own.

Good luck!



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