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Why Startups Fail?

There are plenty of researches out there that have pointed out that almost 85% of the start-up fail within their first year and 90% within a two-year span. This is by no means a humble figure with more than half the companies kicking the bucket. One of the major reason behind the failure of a start-up is the lack of funds. More often than not, a start-up with a great idea fails to make it to the top due to shortage of money to fund their projects. But money is not the only reason behind an unsuccessful company. There are other avoidable factors that sometimes lead to a company’s failure. We have tried to address a few of them.

MISTIMED PRODUCT
There are many companies that come up with great products. They have all the right checks in all the right places except one. Timing. The launch of a product must be made keeping in mind the market scenario at the time of launch. Launching a great but expensive product during the time of recession will be a faulty decision.

PRICING
Sometime a company comes up with a brilliant product that is to be launched in a market, ripe for taking. They sometimes commit the sin of pricing the product at a much steeper margin that it should have all in the confidence that it will sell as it has no competitor. This leads them to their downfall. This is a fatally wrong assessment and should be ignored.

COMMUNICATION
In todays’ world where the internet has turned the globe into a global village, it is important to tell the whole village or at least targeted area of the village about the product. It is importance to introduce the audience to your product so that they can understand the benefits and engage with the product.

QUALITY
Sometimes, what entrepreneur does is, they get so excited about the response that their idea receive that they rush to launch it in the market without the much needed refinement that the product required. This proves disastrous for the company as it loses its credibility which can be the death of it quite easily.

STAGNATION
We have a great example of Nokia to show as to what stagnation could do a world class and well established company. It has all the money to save itself but failed as it forgot the most important element of a business i.e. Innovation. It is important to keep refining the product and not leave it as it be.

There can be a hundred more reason behind the failing of the start-up but what is most important element is that you keep yourself humble and listen to people are saying instead of condescending upon other peoples’ thought.

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