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in Technology - 05 Oct, 2013
by Tech Journalist - no comments
The top 10 reasons why most startups Fail

When we hear the word start-ups, immediately we think of Silicon Valley, the place where the start-up culture was born, the geographical region with the most tech startups and tech talents.
And thus when analyzing the reasons for start-ups failures, we should also analyze the Silicon valley role in these failures.

And there’s way more start-ups failure than you would imagine, even when these start-ups had good funding they will still fail!

By startups we mean tech related businesses, not none tech small businesses.

The main reasons for Startups failures:

1- Bad business model: If  there’s no revenue or the revenue is lower than the operational costs, the startup will burn money and that could lead to it’s failure.

2- No market for your product or service: If you are planing to sell a product that has no market (no demand on it), or offer a service that people are not comfortable with using it online  … you might have a problem!

3- Not enough, advertising budget: If you are spending less than what you should on advertising, or if you fail to use the appropriate advertising strategies, your company growth will be slower than it should be, and in most cases lack of  advertising equals failure.

4- Media Exposure: Some startups need to stay in the press to succeed, especially start-ups that need a user-base. Failing to get enough media attention to have enough users to reach a critical mass, could lead to the startup failure.

5- Bad leadership: Many of these startups are founded by young entrepreneurs, many are college dropouts, even-though they might be very nice and very good people, it does not mean they have what it takes to lead a company – not tough enough, not smart enough …

6- Funding / capital: Without funding, you will have to use your own money, and that means you most likely won’t invest as much on advertising or on tech talent hiring, the bootstrapping will slow your company growth, and will render you less competitive in case another startup is offering the same thing!  On the long run, almost all startups fail because they don’t have enough capital!

7- Bad Branding: The first wrong decision that you might take is choosing your company/ startup / product name in a way that people will not be able to memorize easily or in a way you won’t be found online easily, for example: naming your company “Pants”, you will never be able to rank as first position in search results even with the best SEO service. Another example, if you name it let’s say “banana shake it”, it is unique and you might be able to get it to top of Google results but the name is not easy to memorize (for the public).

8- Bad Presentation: Probably the biggest mistake a startup can do, is having a bad presentation, an ugly website design or an ugly app will decrease the credibility of the startup and lead to the loss of many clients/ users.

9- Bad user experience & customer service: If your users are not happy, this will reflect on your company online reputation online, and not only the users and customers will leave but their feedback will make you lose many other potential users/clients.

10- No Explainer Video: When it comes to services, you need to explain what your service is all about, users will not signup for a service they do not understand unless the service is already popular, so what to do in the early stage, to explain to your visitor the importance of your service, and why he/she should sign up? Simple, get an explainer video creation service to make an interesting video that explain the concept in simple words! example below: