10 Top Reasons Why Most Startups Fail Without Even Trying

by Startups 04 October 2021


“Well begun is half done”This time-tested proverb by Aristotle is still valid today.

Why do we always emphasize the beginning of a task? It is simply because if something starts well, chances are it will end well. Entrepreneurship is a fancy word for many.

A lot of people dream about running a successful company or organization but simply lack the will or resources to execute it. Some of them who really want to achieve their dream, go about gathering information and investors for their startup. But many fail and struggle to keep up with the changing environment.

This article will list down the potential reasons why and help you avoid them if you’re looking to start your own company.

Top 10 Reasons why most startups fail without even trying 

After initiating their start-up, most entrepreneurs focus on success stories. The successful ones, however, perform a detailed study on why exactly start-ups fail, analyze those failures, and try to prevent those mistakes in their journey.

Let’s take a look at the top 10 reasons why most start-ups fail without even trying.

1. Your ideas aren’t ‘cashable’

1. Your ideas aren’t ‘cashable’

How many times have you thought that if a specific product existed, it would make your life easier? Many times! Right? So, you decide to produce and sell the product but fail miserably.

This is a common scenario in many startups that firmly believe in their product and go ahead developing it without gathering much information.

A lot of startup founders overestimate the demand for their product and without prior testing, launch it. If only they validated their pilot projects before the actual launch or even performed beta-testing, the disaster could have been averted.

2. Know your audience

Know your audience

To hit the bullseye, you need to know where you’re aiming! Market analysis, in simple terms, will help you familiarize yourself with your target audience and the current market conditions. It is a qualitative and quantitative analysis of the specific industry you’re planning to step into.

Market analysis also helps your product to stand out in a market otherwise flooded with products. It will also help you analyze the market’s customer segment, buying patterns, customer expectations, cost competitions, and understanding of the regulations required to enter the market. Before you venture into the vast seas of development and designing, dip your toe first. Using a market analysis template, you can design your survey to find out what suits your audience the best.

3. Your passion wears out

Your passion wears out

With the daily grind setting in, the ideal situation is replaced with reality. The real problem here is if the entrepreneur lacks the motivation or probably doesn’t know why they started the business in the first place.

a) Struggling with work-life balance

Before jumping on the startup bandwagon, you must understand that work-life balance isn’t applicable for you for the first few months. Just having an idea and some financial aid is not enough, the biggest tool that you will consistently need to kick start and boost the growth of your company is passion! Hard as it might sound, a lot of capable businesses fail due to burnout. It is impossible to work hard and create an impact unless you believe in your product/service.

b) Working at odd hours

While an employee in a well-established company works for 40 to 45 hours a week, entrepreneurs may find themselves working much more than that. Helping your startup doesn’t always need money but a big share of your time. Most of your waking hours will be spent working on your dream project. It is easy to give in and not want to work for extra hours but you need to stand out, that ‘extra effort’ is needed.

4. Falling short of funds

Finding a prospective investor should be a major part of any dream project. Interviewing your investors and finding out more about their expectations can be very helpful in choosing the right investor for your project. As we know, disagreements between the investors and founders can also be a major issue and it is in the best interest to have a clearer picture.

Most of the time, the initial funding for such dream projects comes from burning through your own savings or investments from close friends and family members. You will be surprised to know how many projects fall flat just because of a lack of funds. The process of finalizing your investor should happen much before rather than in the later stages of product development. As a result, lack of preparation and funds deflates the projects with the most potential.

5. Expanding at the wrong time

Unless you’re sure, don’t proceed. Expanding your business earlier than you can manage is a classic mistake.

With expanding a business of any type, there is also a rapid increase in the demand for the product, and if you cannot meet them, it can hamper your hard-earned reputation among the customers. It will most likely affect several other aspects of your company. This also ties to a lack of planning.

Having a foolproof business strategy is important which should also include the timeline for expanding the business and ways to meet the rising demands for the product.

6. Hiring wrong people for the job

Your success depends on the type of employees you have. Believe it or not, but even with the right timing, best resources, adequate funding, and passion, a venture can fail if it doesn’t have like-minded people to grow with.

In some cases, co-founders of the first set of employees for the startups are mostly friends or someone related to them. While that isn’t a problem, if they’re qualified, sometimes they lack the required amount of experience needed. For the formative years of your venture, it is important to hire the right people to ensure smooth functioning.

7. Not having an online presence

Not having an online presence

Gareth Hoyle, the Managing Director at Marketingsignals.com explains, “It’s clear to see that having an online presence and being visible on search engines is a key area e-commerce startup need to focus on to ensure they succeed.” But the million-dollar question is why.

a) Why is online presence needed?

Long gone are the days where simple advertisements fetched profits and attracted customers for the business. Everything is online these days. Even the smallest of businesses. For you to succeed in today’s competitive market, you need to understand that online presence is non-negotiable. In an era where everything from groceries to medicines is ordered online, not having a website or an app in relevant businesses is going to kill your prospective customer base.

b) What are the best platforms to use?

Building a social media presence is very important. Some of the most popular platforms that you can take advantage of our Facebook, Instagram, Twitter, and LinkedIn.

c) How can you keep your customers engaged?

By posting regular content on a daily basis and interacting with your customers, you can strengthen your online presence that will later translate into funds.

8. Poorly developed product

Do your homework. An idea isn’t enough! Your data needs to be backed by market research when you propose to develop or launch a product. Find out whether your product/service will add any value and is competitive with your rivals. The product should either be very different to attract customers or a better, advanced version of the current counterparts.

Become customer-centric. This fact cannot be emphasized enough how significant being customer-centric is! To build and strengthen the bond between your brand and customers, it is necessary to show your customers how important they are to you.

Provide good customer service. Brands that ignore this advice, fail inevitably. Respond to complaints, suggestions, and queries, whether on social media platforms or by mail. Engaging is necessary for your business to thrive.

9. Poor marketing skills

Once you’ve established the foundation for your startup, you will require a management team to run your business. But it is difficult to sell a product no one knows about.

Publicity is key to survival in an industry that blooms due to the presence of a strong Public Relations (PR) team.

People from more technical backgrounds seem to overlook or underestimate the power of marketing and social media. However, an inadequately managed marketing/ sales team will also lead to burning out the fire (the fire of publicity) before it starts to spread.

A lot of startups fail to thrive past their initial phase because of hiring the wrong marketing/ PR team. An improperly led team with impossible workloads is a recipe for disaster.

10. High competition in the market

Most startups fail due to the high level of competition in the market.

Despite the good quality of products/services, they conk out due to the inability to survive against strong competitors. For example, a new smartphone brand regardless of amazing features and reasonable pricing will struggle to succeed against brands like Apple and Samsung.

Lack of uniqueness will attract fewer potential customers and the growth of the product will gradually die down.


If you’re up for a new venture or just helping a friend with their side business, knowing what not to do while preparing to launch your startup is extremely important. After you’ve read through the article, you will know what to expect and look for while driving your company towards success.

There’s nothing such as being overprepared. Doing research and preparing notes (literally) only makes you thorough with your vision. No business can thrive if they’re unfamiliar with the obstacles that they might face while laying the foundation and during the development of the business.

Franklin D. Roosevelt rightly said, “A smooth sea never made a skilled sailor.”

Learning from the mistakes businesses make and knowing how to troubleshoot will help you sail smoothly.

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Ariana Smith is a blogger who loves to write about anything that is related to business and marketing, She also has interest in entrepreneurship & Digital marketing world including social media & advertising.

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