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The culture of founding a new business has been growing rapidly in recent years. Startups are believed to change the face of business and technology. Although there are some startups that reached to the success ladder in no time while there are other countless startups have been brought down on ground at the same time.

It is well said that it is from failure that we learn our best lessons. Not many startups want to dwell on their experience but there are many startups coming forward to share their path of failure. Hence, after reading the stories of entrepreneurs about their startup failure, I have come up few reasons, why do startup fail?

Let’s check out the list:


1. Research, research, research

Ideas are the backbone behind startups and an extensive analysis of the market needs to be done before starting a business. It has been noted that 20 percent of entrepreneurs in a survey have reported startups failure because of the product-market fit. Therefore, Entrepreneurs must get market insights at an initial stage in order to run a successful business.


2. Competitors throat and Market Conditions

To run a successful path in the market, a startup founder should not only focus on its business but also look after their competitions. Most startups today have the feeling that their product/service is the best in the market and can have a smooth path, well it’s just another meaning to say Goodbye to your product/service. There are millions of startups formed every hour and ideas are similar. Hence, tracking your competitors will save your startup.

Similarly, consumer markets today have varied interest and are phosphorous. Demands and needs change quickly. Hence, one needs to be innovative and envision work without ignoring the market realities of now and the future.

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3. Wrong Target

Before diving into business without analyzing the prospect of the target market will surely hit back and hurt. Having an idea and creating a product/service will not help any startup to fight into the business. Due to inadequate research about the market, product/service most startups fail to understand their target audience, which leads to failure of the product/service and closure of the business.


4. No Business Model

Many startups have a clear vision but do not create a proper business plan. A business plan gives a clear idea of your operations. Every Startup company must create a business plan to articulate every single aspect viz. customer segment, distribution channels, cost, and revenue models etc. of their business. Failing to create a business model often leads to missing out on one or other important aspects. As we all know, small mistakes can lead to big loss.


5. Demotivated Team

Lack of expertise and motivated team, not having a same mission or vision, also, Disputes and Disturbance among the team members may contribute to the startup’s undoing.

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6. No USP and Poor Product:

In the excitement of building up an own startup or a brand, people often forget to research about an idea or a product, there are several ideas and product or service developed every minute. With an increasing competition, entrepreneurs should always differentiate its products/services in terms of a Unique selling point. Entrepreneurs often make similar products which result in failure of the same.

Also, many startups deliver faultily, expired or used products/service. If the customer is unsatisfied or had bad prior experience that will lead to the bad word of mouth, and results in failing.


7. Launching Mis-timed

In the excitement of experiencing product/service to the customer, Entrepreneurs often make this mistake of launching product too soon or too late. A startup might have a pre-testing before launching its product/service in order to know about the reviews.

8. Burnout

Startup founders often have a hectic work life and poor life, it is difficult for them to maintain a balance between their work and life. They seem to juggle with too many tasks causing them to burn out and which is vitally visible in their work and causes failure of the company.

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9. No Network and advisers/mentors

Several budding entrepreneurs often wail about lacking investor network and connections. While they are still looking for people who could lead their start-up to success, they fail to recognize their own network that could have been utilized.

It is always good to have a mentor for your startup. Going alone there are more chances of you making mistakes that may lead you to failure. Mentors can guide you in your day to day decisions to avoid falling off the cliff.

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10.Lack of passion or motivation

If the founder is interested in a product merely for Profit, and not because they believe in an idea, then might loose the track. Also, if the working environment is too dull and lazy can take the focus out of product or customers that also reflects in breaking of the product/service.

Few other rare reason they might lead to the downfall of a startup include legal issues, no backup plans, lack of Investors and Customers interest, poor after sale service, Pricing Policy and Poor Marketing.

One cannot build a multi-billion company in a day, or month or a year. Everyone faces failure in their phase of life. The only difference is, some people face it too early and some people later in life. But surviving that failure and getting up will only make one person strong and successful in life.

Thus, let’s enjoy that failure because success is not too far.

Here are Few Startups that Failed in 2016.

1. Skully– Skully developed augmented reality motorcycle helmets. It failed because they had some issues with money management, for example, some employees say the founders spend money on strippers

2. KARHOO– Transparent marketplace for ground transportation. They mainly failed because they had a poor product

3. Peppertap– Peppertap is India’s largest and fastest grocery delivery service. It failed because they had a poor Product

4. Gozoomo– peer to peer transactions of pre-owned cars. The founder couldn’t come up with a sustainable business model

5.– Frankly is for Frank conservations. The founders decided to return investor money because their product couldn’t achieve product market fit.

6. Moveloot– Simplifying used furniture sale. The company failed as they couldn’t come up with a sustainable business model.


Forbes- Vic Lance

Nitinkumar Gove- Your Story

Naman Nepal-

Startup Fail 2016 example-

About Sumit Chandan

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