Webhobs Hosting Blog

5 Common Reasons Of Startup Failure

A Startup is the dream of an entrepreneur, in which a particular or group of persons, invest their valuable years of time and money. An entrepreneur gives everything of his or her life, that a startup takes and still 99% of the time, It fails. If we particularly looks at the internet based startups the failure rate is 99.97%. It means almost every internet based startup fails. The failure rate is up to 99.995% for the developing counties like India, Indonesia and Russian Federation. The entrepreneurs always blames the unavailability of money and resources, for the business failure, but if that's the only reason of failure then never the established companies like Nokia, Tidal and Atari was failed. However the unavailability of resources and money is one of the biggest reason of failure, but it is not the only reason of failure. The most common reason of business failure are as follow:-

  1. 1. Lack Of Business Opportunity
  2. The biggest reason of startup failure is lack of business Opportunity. A startup which don't have good marketing strategy, Even don't have good service and support, still can earn a lot of money, if it's have a single thing and that is Demand In Market. We needs the depth market research, that whether the world needs the particular business idea startup or not.

    If the business idea is originated from our own mind rather then inspired by other idea, or copied by some other existing business then the failure rate will not be more then 70%, For these kind of business startups.

    A Startup which fulfills the existing market demand have more success rate, rather then a startup which creates the market demand for it's business

  3. 2. Unavailability of Money and Resources
  4. Sometimes your idea is really great but the required resources and liquid cash is not enough to implement the same. These days the biggest companies of world are also facing the problem of liquid cash unavailability and that's why the startups try to get funds from bigger venture capitalists rather then going for a small investing group or individual financier.

  5. 3. Technology Failure
  6. The technical failure is most common failure among internet business startups. Sometimes The Idea behind the startup is a really great. The startup also gets the required funds from biggest investing groups but they chosen the wrong technology to implement their platform and they fails. In the last decay the startups which adapted the technology of Microsoft have more failure rate rather then the companies which are using open source technology.

    Case Study:- The market leader Nokia chosen Windows Os for smartphones but the small company of that time Samsung, Chosen the Android (An Open Source Software Of Google) for smartphones and Everyone's know the result. The Nokia completely failed and Samsung is the new Market leader in smartphones market.

  7. 4. Lake Of Management And Marketing Skills
  8. The poor management skills of company effects the quality of services, and by doing that they may loose the unremarkable image of their brand name. If their is competition in market and the end user have number of options for a particular product, then the company which have better management and marketing skills, will win the race.

  9. 5. Poor Leadership Skills
  10. A Great leader will always be a successful person in his personal and professional life. If an entrepreneur don't have good leadership skill, then the startup will always pay for that. The great leadership skills will always helps us like for Getting A Particular Contract or To Impress The Investor.

Webhobs Hosting Services. All Right Reserves