Why Do Startups Fail? Here Are 10 Reasons!


Why Do Startups Fail? Here Are 10 Reasons!

“Ay, startup ka idea sunega?”

Nowadays, the world is booming with startups, both successful and failing. More of the latter. While there are many fairytale-like success stories, flipkart, and such, don’t go making a startup based on that. A vast majority of startups either fail or eventually fizzle out. But why? After a bit of analysis, CBInsights came out with the following reasons.

1. No Need in the Market

While solving problems that are interesting to do so may seem like million dollar ideas, unless there’s a need for then in the market, it won’t work. This reason was the biggest one due to which startups fail.

2. Running Out of Cash

Baapu de de thoda cash. (actually, no. I did not just just say that.) The next biggest reason for startups failing is running out of funds. Be careful with your spending.

3. The Team Isn’t Right

It’s crucial to have the right team: diverse, with the right skills, and such. And so, “Not the right team” is up third on the list.

4. The Competition Got Em

It’s a dog-eat-dog world out there, and as such getting outcompeted is the fourth biggest reason startups fail. Don’t take your competition lightly.

5. Pricing & Cost Issues

It’s extremely important to correctly price a product or service, since pricing too low or too high can be disastrous.

6. Not User-Friendly

Now we all know the saying “The customer is always right”. Well not maybe ALWAYS. But when they’re forking over wads of cash, you’re expected to put out a user friendly product aren’t you? If the users needs and demands aren’t met, and the product isn’t user friendly, the startup tends to fail.

7. The Deficiency of a Business Model

While your idea may be legendary, if one doesn’t have a legit business model to run it by, your startup may end up flopping. Think ahead.

8. Weak Marketing

Up on the eighth spot in this list is poor marketing. It’s up to the startups to know their target demographic and how to reach it.

9. Being Stubborn & Disregarding Customer Feedback

This is the Ninth biggest reason for startups failing. It’s pretty important to take customer feedback seriously, and be moldable according to that.

10. Bad-Timing

Mis-timed products are the tenth biggest reason for failure. Launching too early or too late can be dangerous for a company.

These were only the top 10, and there are several other reasons like; losing focus, rifts between founders/investors, bad locations, lack of passion and expertise, and so on. Startups are a risky business. But if you make it, you’ll make it big.


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Persias Tadiwala is a student on a journey to discover the ways of this world.

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