Why startups fail ?

Spread the love

This is a big question that comes from all people with startups are about to have a startups.

There are 582M people having startups around the world but about 99% of them fail due to some or the other reason.

Well you might be curious to know about

What actually, are the reasons?

 What mistakes that people do during having it are?

How can you avoid them?

Before getting started with it let’s know something about it.

What are startups?

It is said for a company that’s in its first stage of actions and operations founded by one or more entrepreneurs to develop a product which is in demand.

For it people requires a market to grow in. Startups are technology based and are mostly online.

Some examples of good startups companies-

  • Snowflakea cloud-storage serving startup
  • SamsaraAn industrial IOT company serving people of every sector. Applying AI solution.
  • Petalcreate credit cards for the people.
  • AirGaragefor the parking governors, It serves garage and parking to people.
  • Bloomscapeprovides sells and purchase of plants

Some Facts no one knows

  • 70% of people get idea of having their own company while working in another one.
  • 80%have no idea whether they will able to make a good profit or not.
  • 94%founders are men.

Before starting any business

  • Find a problem- Get to know your hobbies through which you can get many ideas. After getting It ask your friends whether they like it or will thy pay for it?
  • Get a mentor-Search about the seminars or some sources that offers you ideas and platform for business.
  • Learn to spend money on things you need and not on what you don’t need.

Steps for a good startups

Business plan > Funding > Get surrounded with right people > Have you website > Reach out to people > Keep going

steps for startups

Registration is essential for every startup, Steps of doing it

               Source: https://cleartax.in/s/7-steps-to-register-your-startup-in-startup-india

Some startup fails and reasons behind in 2018 & 2019

Just Buy Live

  • Launch-2015
  • Founder-Sahil Sani and Bharat Balachandran
  • About- An ecommerce website
  •  Reason of failure- Its out of reach business format.

 Note: Entracker reported that the cofounder of the company stated “company is just temporarily been disabled and will resume after getting the appropriate raisings”.


  • Launch-2013
  • Founder-Anter Virk and Anish Basu Roy
  • About- An e-commerce website
  • Reason of failure- Money earned was all spent in paying off employees, partners etc. It was facing an extreme competition.


  • Launch-2014
  • Founder – Saurabh Agarwal, Mahin gupta and Sandeep Goenka.
  • About- Among India’s largest crypto exchange
  • Reason of failure- RBI banned and restricted other banks from giving any services, payments to Zebpay.

Why startup fails and what to do?

No Demand

A product of some companies are so useful for the customers and market that they pay good prices for getting that. But some business product fails to grasp the attention of the customers.

Or either their product is not explained well.

It is said that “It just takes five seconds to explain what the product is all about, if in a crisp and clear way”. Some companies fail in explaining about their product well.

Ways to avoid it:

  • Get a proper tagline that explains about your company and product to your customer.
  • Get a good product and look if it has a demand in the market.
  • Ask is your product worth to sell?

Lack of skills

All it requires is a marketing skill. Some of the skills are learnt when you get into it.


It happens that your product is not good enough so you worked on it and made it worth for sale. Now you are having a product but, what is the problem? That is unable to reach people.

To make it happen skills are required.

Ways to avoid it:

  • Look what your competitors are doing; what strategies are they adopting to reach upto more people.
  • Have some course and webinars.

Cash Burn

People make a mistake of ignoring the cash burn. They are unable to fill the gap between the ‘paying to suppliers’ and ‘getting payments from the customers’. Reason for this may be no getting the required profit of your product and delayed payments.

Ways to avoid:

  • Keep looking at the profit and spend accordingly.
  • Avoid advertisements at the time of low profit or delayed payments.

Weak team

Some of them are no able to manage their team i.e. they lack leadership quality. Having a weak team can take you to an immense loss. Sometimes the team member does not have the proper knowledge and also the skills to turn up a product into good advantage. They are just focused on getting their salary at the end of month.

Ways to avoid:

  • Hire team having a good skill and knowledge.
  • Make sure they are aware of their responsibilities regarding the company.

Inability to get investors

It is very essential to get investments for an entrepreneur. To get one Yes you have to pass hundred No and that’s so true. Some fails to get companies to invest in their’s.

Ways to avoid:

  • Reach out to the investors.
  • Give them the proper knowledge of your product and what profit wills you earn if you get their investments.
  • How will their investment profit them?
  • Tell them about your business planning.
  • Turn their no into yes.

Learn more: https://www.bbva.com/en/why-do-startups-fail/


I have mentioned some reports, mentioned the examples of fails, tips and measures to avoid  and reason why such things happens.

Having it is a good choice. Remember,

A journey from being among, under hundred to being, hundreds, under you is never easy, you fail but to get up again.

Hope it was all useful.

By: Sakshi Mishra

Leave a Comment

Your email address will not be published. Required fields are marked *