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Startup Talk: The Top Six Reasons Why Several Fail

 Reasons why a Startup will fail

Currently, we live in an American entrepreneurial age, where innovation and big ideas can produce big rewards. However, a startup has a 10% at surviving; here’s why —


Startup culture is incredibly tantalizing to entrepreneurial, adventurous, explorative, daring, creative, and innovative minded-people in America and beyond. The idea of building a concept, selling that concept, and of this from the ground-up is as close to the American dream as many will be nowadays. While several startups have had tremendous success and profitability, only 1 in 10 will succeed. A startup’s success is determined by several, very different factors that are the difference between a startup’s success and failure. 


Here are the top six reasons why startups fail: 


  1. There is no need for your product in its prospective marketVenture capital database CB Insights built a report that found 42% of all failed startups didn’t have a proper market need. While several private companies and the general startup stem from a passion, or an interest, it sometimes (unfortunately) doesn’t matter if it doesn’t have a proper/unique application. Practicality is key when developing an item. Once it has a unique, and concrete need, that is when creativity comes into play, and your product is a “solution” rather than a “carbon copy.”
  2. A lack of necessary structure — Structuring your attitudes, ideas, and viewpoints is a highly critical part of building a successful startup. Inc.com does a wondeful job of highlighting these attitudes which range from short-sightedness, egotism, and arrogance. Any great idea needs great organization, and processing, in order to come to profitable fruition. In the end, poor structuring like a lack of a business model can snowball problems like running out of cash flow.
  3. A lone wolf will eventually need a pack — Building your startup as one person, one founding member, is like pre-ordering a gravestone for your company. No partners, team, or anyone else to help out spells ultimate disaster, since responsibilities can’t be properly delegated at deliverable moments. Erin Griffith of Pando.com learned from startup expert Steve Hogan, that he has seen multiple startups fail from a lack of partnerships. 
  4. The product isn’t simple to use — Instant Enterprise Economy will (as it has currently) dominate digital services. The reason is because now than ever, people can “tap and choose” anything from transportation to shopping to property management. Apps and their services are designed for simplicity; easy to use features that have a market valuation in the several billions.
  5. Everyone wants to innovate and build businessesThe Kauffman Index calculated that there almost 530,000 new business owners in the United States each month during 2015.  That is a lot of competition between businesses vying for market spaces that are —more often than not— extremely crowded. This, along with the the other three factors, ties into our last (and most important) reason startups fail.
  6. Your company doesn’t separate (or attempt to) separate from the pack — Some as simple as adding a consumer audience, or changing the attitude of an industry for the better, can be a defining trait in building a successful startup. A clear, definitive identity can sleight the odds in a startup owner’s favor, as more and more companies attempt to build better ways to live.


So here’s the best possible train of thought if you’re a rising business owner: Think smart, build simple, and find a practical way to stand out. 

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