Why Some Startups Fail, While Others Succeed
Although the reasons are common why some startups succeed while others fail, it seems not everyone is privy to this kind of information. If a startup wants to be successful there are certain factors that need to come into play, and on most occasions these factors are consistent.
According to a recent study 75% of startups failed in the first year, and 50% of startups failed after the first five years. So it looks like only a handful of companies go on to have growth and success. Now you may find these statistics worrying, but there is a way out. Look at the companies that have managed to succeed with some of them becoming the biggest players on the market.
It’s worth looking at the details, some of these are management mistakes for why entrepreneurs experienced startup failures.
– Lack of focus
– Lack of motivation
– Lack of passion
– Wrong advice
– No proper mentors
– Lack of business related knowledge in finance, marketing and operations
– Spending too much money too soon
There was more research done on the failure at company level, which includes leadership failure.
– Ran out of capital
– No market requirement
– The wrong team members
– Poor product or service
– No workable business model
– Poor advertising
– Got out-competed
– Underwhelming customer service
Keep in mind that these are all business issues and team related issues. Usually, Leadership comes into play when it comes to driving a business model and building a strong team. In addition, it is imperative businesses have a good capital because one of the biggest reasons for startups to fail is running out of cash.
Now looking at the opposite end of the spectrum on why startups succeed, there are several factors which are good indicators for success.
– Passion and dedication
– Commitment to stay the course despite the challenges
– Willingness to be flexible
– Persistence and patience
– Observe, listen, learn
– Be surrounded by the right mentors
– Extensive knowledge on the business model
While these factors will certainly help you make headway with your startup they do not guarantee success. How far you go, and how much your startup grows depend on your commitment and passion to succeed. If you take a look at factors for failure and success, the word commitment keeps coming up. It also implies you need to have a plan. The most successful companies are flexible but they do not pivot more than once or twice.
When you analyze the reasons you realize that you need to believe completely in what you do. The passion of what you do carries your business a long way. If you start losing the passion and the hope of taking your startup to the next level, it is bound to fail. You need a deep seated commitment and a competitiveness to win. Beyond all this, you need an outstanding team, a team that is as passionate and as committed as you to the business.