10 reasons so many startups fail, according to startup founders | AZ Big Media Innovation

Why do so many startups fail?

To help you better understand the ways in which startups can fail, we asked entrepreneurs and business leaders this question. From lack of expert knowledge to resisting change, there are several ways startups can fail. Read here to learn more about how your startup can avoid failure.

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Here are 10 reasons why startups can fail and ways to avoid these missteps: 

  • Be Willing to Pivot
  • Time It Right
  • Be a True Expert
  • Determine Your Market’s Needs
  • Develop a Social Media Presence
  • Follow an Established Model
  • Plan and Stay Adaptable
  • Stay Passionate About Your Startup
  • Make a Compelling Value Prop
  • Be All In


Be Willing to Pivot

One of the common reasons for startup failure is when leadership resists change and the need to pivot. As an eyelash extension supplier, I had to switch up my business model during the pandemic. It was during this time that I launched my online eyelash extension training classes. This strategy not only brought in additional revenue, but it also created a new kind of customer journey in my business that made loyal brand ambassadors out of my students. 

Vanessa Molica, The Lash Professional

Time It Right

So many startups fail because of timing. The Curricula founding story has been slower than most startups, and that’s okay for me because we took our time to make sure we got this right. It’s been an honest journey fueled by hard work and the desired focus to change the norm. I can’t describe how excited I am every time we sign a new customer because it’s a new opportunity to protect another organization. We are clearly resonating across the cybersecurity industry in desperate need of change. We know we’re on to something really big now.

Nick Santora, Curricula

Be a True Expert 

I believe many startups fail because the founders and leadership team were not true experts in their fields. Lots of entrepreneurs are taught to seek out “gaps” in the market, regardless of what that market is, but the problem here is that without a strong enough understanding of the industry, you can not accurately diagnose a gap nor create a product or service to perfectly cater to it. The best advice I can offer is that if you are going to enter a new market, you have to be the best at it — otherwise, you are set up for failure.

Brett Farmiloe, Markitors

Determine Your Market’s Needs 

One way startups fail is due to a lack of research. It is crucial that you know what your customers want. It’s easy to go into the market thinking you have a great service or product to offer, but you need to remember that there has to be a need for it. That said, do in-depth research on your market to know how to meet your potential customers’ needs.

Derin Oyekan, Reel Paper

Develop a Social Media Presence

I conceived, planned, and launched my company during the COVID-19 pandemic as a side hustle with my business partner while we were both working remotely. Startups commonly fail because they run out of cash for funding. We developed a loyal consumer base through social media outreach, with over 300 interested buyers signing up for our pre-launch email list. Social media outreach is a free marketing strategy companies can develop, so funding isn’t over-budget for marketing.

Ashwinn Krishnaswamy, Oklahoma Smokes

Follow an Established Model

Many startups fail because they try to enter competitive markets with the assumption that disrupting an industry will automatically mean dominating it. Aiming to be the new “Uber” of an industry is no guarantee of success. Completely changing consumer habits is harder than it seems, and reinventing business systems from the bottom up is time-intensive and expensive. 

Not every business needs to be revolutionary to succeed. There is no shame in following an established business model and scaling steadily or offering a high-quality albeit not-world-changing product or service. Modest success is still a success. Better to turn a profit from a simple and straightforward idea than go bust on a moonshot.

Michael Alexis, TeamBuilding

Plan and Stay Adaptable

Many startups fail because they either miscalculate their projections initially through a model, don’t make a plan to begin with, or don’t scale properly. Generally, these three issues can be detrimental to a new startup. When you have a viable business model, you need to execute accordingly and have the necessary resources to carry out your objective.

 Overestimating your profit and not allowing the appropriate time for things to take off can leave you with scarce resources in the end. Others fail because they don’t manage the constant flux of ups and downs even after successfully traversing market challenges. The market is ever-changing, adaptability is critical, and companies that leave room to adjust and remain open-minded will ultimately succeed.

Brandon Werber, Airvet

Stay Passionate About Your Startup 

Startup founders and their teams have to truly care about why the product or service matters and how it can provide value for people’s lives. They must also put a lot of effort into finding ways to connect with their customers. If money is the sole focus and the owner does not feel a sense of connection with an invaluable meaning behind the startup, this can become obvious to others. If customers feel a sense of disingenuousness from a startup owner, this will leave a permanent negative impression.

Mike Pasley, Famous IRL

Make a Compelling Value Prop 

A major reason why startup companies fail is due to marketing issues. There’s not a compelling enough value proposition or a compelling event to cause the buyer to actually commit to purchasing. It also could be that the market timing is wrong and that you’re either too far in the future or stuck in the past.

Guy Bar, Hyfit

Be All In

Managing a startup takes a lot of time and dedication. Entrepreneurs running startups have to be all in; in fact, many startup companies fail because of a lack of time put into the business. Another reason startups fail is because of giving up too quickly. The truth is, any business trials or setbacks should not necessarily be viewed as complete disadvantages. A wise entrepreneur will choose to learn from these experiences and refine their business strategies going forward.

Mary Berry, Cosmos Vita

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