Why startups fail is not a new question, given that the majority of startups fail within the first three years. 

When launching a startup, there are many things to take into account. There are so many factors that may either help your company grow or cause it to fail. 

Many assume that launching a business means you’ll almost certainly succeed. In reality, failure is something that is more common than most people think. According to Statista, the failure rate for startups stands at 67% within the first 5 years after they are launched. When they fail, it’s often because of one of these five factors. Let’s take a look at why startups fail and how you can avoid falling into the same traps when launching yours.

1. Poor Timing

The first reason startups fail is poor timing. Timing is important in any business venture, but it’s especially critical for startups. If you launch your new business at the wrong time, you may find that there is not sufficient demand for your product or service. This can spell disaster for your business in the long term. This can happen for a variety of reasons. First, the market may have changed since you first came up with your idea. If you are launching a tech-based product but the industry has recently undergone a major shift, your product may already be outdated.

Second, your customers may not be ready for your product or service. You may have a great idea, but if people don’t need it or can’t use it yet, it won’t be successful. You have to make sure the timing is right before you launch. Third, you may be entering a highly competitive market. If you are trying to launch a new product or service but there are already similar offerings out there, you may experience difficulty getting customers to choose yours.

2. Lack of a viable product

Another very common reason for startup failure is the lack of a viable product or service solution.

Many entrepreneurs are so excited about their ideas that they don’t ensure the viability of their offering. They rush to get the product into the market as quickly as possible in order to start reaping the benefits of their hard work.

First and foremost, ensure that you’re actually solving a real problem. Second, make sure that your product is high quality. You have to be sure that it lasts as long as possible, and that it solves the issue it’s designed to resolve. If your product is low quality and you don’t do anything to resolve the problem, your business will quickly flounder. Customers will be dissatisfied with your product, and they will likely stop purchasing it altogether (should it get to that stage). At that point, it’s highly unlikely that you’ll be able to keep your business afloat.

3. Bad marketing

Another reason why startups fail is incorrect marketing. Sadly, a lot of the time, it’s a case of “not what you say, but how you say it”.

This happens when a business is marketing the wrong product or has an ineffective marketing strategy. If you are marketing a product or service that no one wants, it won’t help you get new customers. It will only serve to annoy the ones you already have.

If you are marketing your product ineffectively, you won’t reach your target audience and you won’t be able to reach them effectively. You have to ensure that your marketing methods are reaching the right people.

4. Poor internal dynamics

Another reason why startups fail is that the founding team members are not compatible with each other. If the founding team members aren’t able to work together productively, if they don’t have the right skills, or if they don’t have sufficient chemistry, the business is at risk of failure. Moreover, if there is a case of conflicting personalities, it’s bound to affect productivity. You have to be sure that you are choosing the right people to work with you. At the same time, it’s imperative to ensure that you are choosing partners who appreciate your skills and who can work well with you. If your team members aren’t able to work well with each other, they are unlikely to be able to solve problems and they won’t be able to work toward the same goals as a team.

5. Networking

Finally, another reason why startups fail is because of network issues. A lot of startups rely on investors and lenders to help them get up and running. In some cases, they may also rely on partnerships and alliances with other businesses. If you are dealing with a lender or an investor who is disorganised and unreliable, you may find that you don’t get the funding that you need. If you are dealing with a lender or an investor who is dishonest, you may find yourself in serious financial trouble. Similarly, If you are partnering with another business, you have to make sure that you are working with reliable partners. You have to ensure that you are able to work with them effectively and that you are compatible.

Hopefully, by now you have a better idea of some of that factors that can contribute to the failure of a startup. If you’re launching your own company, or thinking about doing so, check out what I have on offer

About My name is Sohrab Vazir. I’m a UK-based entrepreneur and business consultant. At the age of 22, and while I was an international student (graduate), I started my own Property Technology (PropTech) business, StudyFlats which I scaled to over 30 UK cities. I currently help other entrepreneurs and businesses of all size with the digital marketing strategy around SEO, copywriting and content. For more info, please visit here.