Top 11 reasons for startup failure


We all want success, and we all know you need to work in order to succeed. We get fascinated by reading articles on success stories of some individuals in most cases. What we forget to look into, are those things that can make us fail as entrepreneurs and how we can avoid these traps. In this article I will outline the top 11 reasons for startup failure.


Below is the list of the things to look into and avoid.


Survival strategies failed

In business you need to survive, and this is fundamental in business because failure to survive the business environment can be seen as “failure” and no one wants to be called or see themselves as failures. So you need to come up with strategies to survive, and this is mainly a focus of the management. Startups are different from well established companies because we can actually say they are fragile, lack some fundamental muscle to survive in most cases as compared to the well established companies because in most cases startups lack good management.


Incompetent management

Lets face it, a company is always as good as its leaders. We can not take away though the fact that there are some companies that start-up with poor management, but with time they improve. Banking on this fact though is high risk. If you are a leader in a startup setup, and you lack managerial skill, It’s high time you start learning. Learning by the way is not only limited to waking up, going to school or to college for formal education. In this 21st century, you could learn from home, because of this tool that we have which is called the internet, and it’s uses. There are plenty of books and other resources online that could make you a competent leader in your company.


Heavy reliance on “bookish information”

Many startups find themselves falling into this trap of heavily relying on bookish information. Like a computer program, that information we get needs to be updated regularly, and most books we read have no updates. People waste a lot of productive time reading whats no longer relevant. It is of utmost importance, to find and read relevant material. We all know the world is ever-changing, so they say “change is a constant factor”, so you also need to move with the times. Find Ebooks and audio books online to read and make sure they are relevant up to date. Don’t waste time reading what is of no benefit to you.


Poor time management

Yes most startups fail because of poor time management. This is not a factor affecting management only, but also every team member can be affected by this. In most cases, poor planning and poor time management often lead to startup downfall. So much business is lost due to this poor time management. So many clients are lost, and integrity is lost. This does not only apply to startups, but also to businesses on every scale, and its toxic. So many missed deadlines and failure to deliver in time, might mean losing clients. We all know, every business need to make money, and with no clients, the business no longer serves its purpose, and that means there is no money to be made.

Lack of funding

We all know for a startup to grow definitely needs funding. Although in some instances, you just need to creative to survive without funding (we will talk about it in one of the coming articles). It is not a secret that most startups are being funded from the owners’ savings or income. However this money coming from their pockets usually is not enough to carry out some activities. Just as one thinks it’s a simple problem with a simple answer. Well this is not the case for everyone. It is tough for startups to grow without external funding. Most might think that it simply is a problem that is solved by going to the bank to ask for a loan. It is more than that because banks need collateral and as a startup, you usually have nothing to use as collateral. We however think that for survival you also need to build teams and you will be surprised how much impact this will have on your funding needs.

Team work skills

As we mentioned in our article, How to become a successful entrepreneur that, as an entrepreneur you need to be a good team builder because these teams will help you achieve more, as they say (T.E.A.M is short for “Together, Everyone, Achieves, More), because we know that the collective efforts of team members yields greater results as compared to independent individual efforts. Company leaders (scale doesn’t matter), big or small need to develop the spirit of teamwork. Greatness and success of a startup can be achieved through team work. When we work in teams it essentially means no one person does all the work. When team members share the workload, some problems that draws startups back are eliminated. It simply means the company does not have an over worked workforce. This implies that every team member can now work to optimum capacity without tiring and this goes a long way keeping your customers happy and in making them keep coming back. Having a motivated workforce also means effective value edition.


Failed value edition attempts

It is of no use to be just buying and selling. Buying low and selling high without value edition is very bad for business. The basis of making money in business is value edition. When you buy something for resale, usually you will not make much money as when you buy something and add value to it. Value edition is essential in business so it is a must, else you risk failure. Value edition also means your company value and reputation not to mention your income will increase.


Every business needs a strategy for marketing it’s self. It is important to use easily available tools for marketing. It is good note that startups need not to have a huge marketing budget now. Should a startup fail to market it’s self, chances of failure are very high. Either ways, a business needs to communicate to its potential clients about its products. There is no way clients can look for that business if they don’t know about it.

Because of the advent of latest technology, it is easy now reach out to clients via electronic means. Electronic or digital marketing, is now a fundamental part of marketing in the modern world. It is important to note also that digital marketing is cheaper and more convenient than conventional marketing. Digital marketing effectively reduces marketing costs and so that means money can now be used for other purposes other than marketing.



Most commonly used expression is that, “Increase your income and cut on expenses“. That is actually true. It is good practice for a business to go for cost cutting measures. As we mentioned under marketing, online presence is key. In this modern world startups fail because they lack funding and so marketing suffers. When marketing suffers expenses keep piling up and spiral out of control. Some of these expenses can be reduced by cutting the marketing budget. A simple way is having a well designed website that helps with online presence. A website is cheaper than conventional marketing means. Also it is good practice to engage with clients on social media as well, and this is even cheaper. Some ideas to increase your income can be found Here.

How they handle failure

The way people handle failure sometimes determines how much progress they will make. Progress determines success. Humans are not perfect, and conditions are never perfect. Should you fail to make some calculations or lose money in some failed investment, it is important to accept it and move on. But It is also important to learn from the mistakes. When you fail, and you give up too quickly, you  risk being called a failure. When you fail and you learn from it, and get up a better person you are not yet a failure. It is vital however to learn to detect danger. If you hold on for too long you might end up losing a whole lot more than what you should. The skill of recognizing danger and leaving before you lose a lot, comes with age. It takes wisdom to be great at it.

Small dreams

Dreaming is good but it’s not good if your dreams are too small. Some startups however tend to go on the extreme opposite end but this is not good either. When your dreams are too small, it will limit you potential for growth. Therefore, it is advisable to aim to be the best, aim high because if you aim low you might just be limiting your potential. If you aim low and fail, you risk bouncing out of business.

like they say “Aim for the faintest star, even if you miss, you will land somewhere on the moon.


In conclusion

Factors that can make a startup fail aren’t limited to the mentioned in this article.  There are many more factors. As an entrepreneur or a business man, it is important to share what you know, and also learn what you don’t know from those that are knowledgeable. I would like to hear what you have to say. Any additions and subtraction from what’s mentioned in this article will be greatly appreciated. Entrepreneurs never stop learning. Stay motivated, and Aim high. Aim for the faintest star. Motivation is like bathing, that’s why it’s recommended everyday.

Please leave a comment in the comment box below. Alternatively, comments and suggestions are welcome on my Twitter or Facebook profiles.



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One Comment

  • No street smarts is a biggie Tapiwa. People think start ups are mechanical, or can be hacked, or solved, through book smarts alone. My blog grew from nothing into something cool – same with my eBook – heavily influenced by my street smarts, or experience learned on the fly as I circled the globe.

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