Developing a startup is not an easy matter. Not only does it require you to work hard, but it needs to be done with an appropriate strategy too. Behind the successful stories, it turns out that there are many startups that fail and just disappear. According to Forbes, the number of startup failures reaches 90 percent. You do not want to be included in that list, do you? There are many factors that cause a startup to fail. And if you are planning to build your own, it will be much better for you to know what causes many young entrepreneurs fail to develop a startup company.
Not Able to Provide Market Needs
This is what happens mostly in the world of startups. In fact, there are many entrepreneurs who build startups merely based on their hobbies, without considering many other important aspects, one of which is the existing market needs. Actually, there is nothing wrong to start a business from a hobby, but you also need to know whether or not your hobby or interest is needed by the community.
In the future, it will certainly be in vain if your hobby turns out to be not in accordance with the demands of the market itself. Thus, if you are going to develop a startup, you should start by identifying problems that often arise in the community. From that point, you can provide a solution to the problem.
Running out of funds
Funding problems are, indeed, the most common problems that often occur in any business, including startup business. Many entrepreneurs fail to develop a startup company because the funds are already running out in the middle of the process. Not only is this problem faced by self-financed startups, but it also happens to startups funded by parties. Running out of funds can be caused by poor allocation of funds, it could also be caused by a very slow development. To avoid such conditions, before starting a startup, you should plan your finances carefully.
If it is not noticed from the start, internal conflicts can be a serious problem that often leads to startup failure. In developing a startup company, of course, you will often encounter obstacles and problems because there will often be different views and opinions in responding to the problem at hand. If you do not take it seriously, this could threaten the development of the startup that you build.
To minimize this, you, as the founder, should understand the strengths and weaknesses of each team member, including you yourself. Also, do not forget to recruit members who have not only the abilities needed but also a positive attitude.
Underestimating the immediate actions
For some people, a creative idea is something that is very extraordinary in business. Creative ideas are, indeed, very important. The only problem is that after having an idea, they do not take any necessary actions. Although it is very important, many people often underestimate it. If you do not want your startup to face its failure, do not just stop at a creative idea, but you should think about how to realize the idea in real action. Your accuracy in executing the idea is very important for the existence of your startup business going forward.
Have you ever heard about pivot? Pivot is the changing concept, which may still be seen as a taboo and embarrassing thing in the startup world. Actually, a pivot is highly recommended when your startup company startup experiences a dangerous situation. Many businessmen avoid to do it and choose to stay in their initial concept because they think that it is the best idea they have. In fact, to make a startup successful, you must be flexible with ideas.
Incorrectly targeting the market
New entrepreneurs are sometimes in a hurry in creating and marketing their products. They often become too ambitious to start and enter the business world in a way that they do not yet know well. One of the most common factors causing you to fail to develop a startup company is the inaccuracy in targeting the market. You should remember that knowing what they produce, and for whom the product is sold is a must.
Having a bad business model
One of the mistakes made by startup founders is that they are too optimistic about the beliefs that they can achieve success and get customers easily. But in reality, they missed the preparation to make a business model even though their business was still small. It can be a fatal case because it will make the business works without any path, purpose and learning process. The founders sometimes only focus on finding many customers.