Why being so negative and talking about failure and not success? Well, that’s because unfortunately it is so much easier to fail than to it is to succeed. As an entrepreneur, I never consider a “failure” as a “failure”. I take it as a (costly) learning experience.
It’s for this reason that we should alway be connecting and sharing our experiences, both successes and failures, to help other to follow our footsteps that stayed on the right path and avoid the footsteps that led us into the middle of nowhere.
To do that, I will follow the post sent by CBInsights:
The Top 20 Reasons Startups Fail:
1) No Market Need
Definitely the most important. As an
investor, I am always curious about
what the market thinks of the projects we
invest in. I have met very smart people,
with very brilliant idea, the only problem is
that the market doesn’t need or want it.
Don’t do something that people don’t need,
it may be a fun experience but it will fail
sooner or later.
2) Ran out of cash
Unfortunately money is essential to scale.
You have to burn cash to pay your employees,
do your marketing, etc. Prepare well your
budget, control your cost and spend enough
time to connect with potential investors.
Startups move fast, if you wait when you have
no money to find it, it will be too late. Most
of your employees will not stay working for
you without a salary.
3) Not the right team
I mention in a previous post that a great
company can only be done by a great team.
Sometimes founders are under pressure and
just fill some position rather than finding
the best talent for each open position. Very
important that you get the best individual
for each position otherwise you will have to
manage a team that yourself don’t believe in.
4) Get outcompeted
Competitors are strong and fast, especially
in China. Follow the competitors move, learn
from them, and always challenge your company
to surpass them. Hire their people if needed,
this is a fight and only the best will win it.
5) Pricing / Cost Issues
Pricing strategy is very important. I remember
reading something about Elon Musk who says that
he will never accept any reduction for any Tesla.
If there is a correct pricing there is no need to
negotiate. Make sure that your pricing is correct
and of course control your cost as well.
6) User un-friendly product
UX is one of the most important roles in a team,
however it is rare to see a position of someone
working soley as UX. UX means User Experience.
Make sure that your customers understand how
to use your product. You developed it, you know
exactly how it works, but does your client
7) No Business Model
It is unfortunately the end of the era
where a lot of companies can become
unicorns without making money. Maybe
only bike sharing in China is the exception
the past few years but most startups today
need to make money to survive.
Do not forget that your project needs to make
money and you need to have a clear business
8) Poor Marketing
Sometimes you have a great product
great team, & enough money. The problem
is no one knows about your product.
You need to define a marketing strategy
to make sure people know about you. Do
make sure to also control your customer
aquisition cost as well.
9) Ignore Customers
Everything you do is for them, it is mandatory
to get their feedback, deal with complains etc.
You should spend time to talk to your customers.
10) Product Mistimed
Not the right timing, you are too late
or maybe too early to get into this market.
11) Lose focus
There are so many reasons why you may
lose focus, you have to deal with a
problematic team and you become more
a kindergarten teacher than a CEO, you
need money and you spend more time
to try to raise funds than to focus on your
customer and product. Always try your best
to not lose focus.
12) Disharmony Among Team/Investors
I have unfortunately met too many people
who’ve had this issue. A good project, making
good money but decision-makers have
different vision, there are shares involved,
someone wants to quit and problems start.
13) Pivot gone bad
It is rare that a company succeeds from the first
product. You need to try, you need to pivot
sometimes. Of course that may be the wrong
decision at times, but it may also be the wrong
decision not to adapt.
14) Lack of passion
Result is not as expected but you still have to
put a lot of energy every day. Then you may
have a lack of passion. In my opinion, if you
have lack of passion it means that you were
not ready to start or even maybe not the right
one to start at the beginning. It may happen.
Think twice before starting another project.
15) Failed Geographical expansion
Scaling up is key to make a unicorn company.
You need to plan it well, plan your money. Scaling
up means that you have to increase X # of your
team, X # of your customers, and (eventually)
X amount of your revenue.
16) No financing / Investor interest
Yes, this may happen. If it does, it is certainly
for one of the reasons mentioned previously.
It is easier to put the responsibilities on others
but at the end of the day it’s still your company
your project, and your dream.
17) Legal Challenges
Startups disrupt. Therefore sometimes that
means working in a grey area. Startups need
to fight to make grey area become a legal one
but sometimes it may go to the other direction
and government will have to shut down your
18) Didn’t use network
You need to talk to your peers, don’t stay
behind your desk and computer, meet with
others, discuss about your problems and
get help when you need it. Use the network
you are in or you are out of it.
19) Burn Out
Sometimes, everything goes wrong, in your head too
20) Failure to pivot
Sometimes it is better to pivot than to fight
for something that even you as CEO do not
really believe in. Some people want to keep
face, don’t want to fail, and therefore don’t
pivot. This will lead to a failure.
As we say in Chinese, Jiayou!