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Why startups fail

“Failure is the first step to success”- or not? Saying that to a young entrepreneur who has recently encountered a dead-end might not be the best bet! 

It takes a lot of courage to accept that an ambitious venture has failed- and to start afresh is a struggle in itself, a leap of faith which many are not willing to take.

Source- http://linkis.com/yourstory.com/2014/1/uhxLE
Source- http://linkis.com/yourstory.com/2014/1/uhxLE
But, the good news is that failure can actually help in building a career- only if there’s a willingness to learn from the hardships! Failure can actually become a guide for “what-not-to-do” when starting-up- and nothing can be more accurate and reliable than first-hand experience.

Why Start-ups Fail?

Addressing the real issue here- why do Start-ups fail? Is it because of the founders and investors, who surge forward with plans without realising that they have more on their plate than they can take? Or, is the business- model just not well thought of? The idea of the startup and the actuality often turn out to be highly contrasting. Entrepreneurs tend to be rigid with their planning— by focusing either solely on the “tech” or on “sales”, without realising the numerous other compliances that need to be dealt with proper strategy.

Another issue is the funding, which has the capacity to turn a little failure into a major blunder. "Too-much funding" is apparently a thing which has proved to be a predominant cause of failure of a startup.

Having a poor legal structure is a leading concern of budding startups. Ignoring the importance of having a rigid legal structure which is suitable to the business model of a startup should be one of the priorities of the founders. For instance, lack of having a sound anti-sexual harassment policy has backfired in more than one cases. Much of the credit goes to media for creating a level of hype that startups evaporate even before the actual trial begins. Therefore, consider legal structure to be very, very important if you’re in for the long run!

It’s not a personal failure!

Source- https://www.linkedin.com/pulse/business-startup-failure-reasons-learnings-kevin-vyavahare
Source- https://www.linkedin.com/pulse/business-startup-failure-reasons-learnings-kevin-vyavahare

The stubbornness often causes entrepreneurs to consider the failure of their startup as their own personal failure- which is never the case! Failed businesses also yield networking opportunities in the long-run. Everything kept aside, it is the experience that counts, which is always craved by companies instead of hiring freshers.

Individual failures of key people in a startup can be an asset too. They can prevent the whole system from failing by bearing the brunt of a small defeat- but only if the top management of the startup considers that minute failures can also provide raw material for improvement!

Reconsider priorities!

In any organisation, failure is the biggest learning source. It is that engine which incidentally causes growth, if taken in the right spirit, that creates the required inertia for a startup. Entrepreneurs should consider it as a blessing in disguise, before jumping to conclusions. No matter what business model a startup has, the ability to manage failure even if an enterprise fails but people find a way to succeed becomes one of the tricks of building a self-reliant society that can regenerate with changing times. In conclusion, always keep a room for failure in your big startup strategy!

This is a YourStory community post, written by one of our readers.The images and content in this post belong to their respective owners. If you feel that any content posted here is a violation of your copyright, please write to us at mystory@yourstory.com and we will take it down. There has been no commercial exchange by YourStory for the publication of this article.

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