Mumbai, August 24: Startups fail due to various reasons and one of the main reason is when they fail to offer the product which the market wants. In short, when they fail to meet the expectation of the consumers. It is very difficult for a startup to stand out until and unless their product offering is different from the others.
Below are a couple of main reasons why startups fail:
Failure to understand consumer demand: Several startups have failed over the years because their product couldn’t meet the expectation of the consumer. Therefore, it is very important to do proper market research before launching your product in the market.
Advertising Blitzkrieg Startups need to spend every penny wisely. However, most startups fall into the trap of spending a bomb on advertising. From getting on board celebrities to endorse their products to full-page ads and TV spots, brands end up burning cash in their quest to get the attention of the consumers. However, what they manage to get is momentary attention in the consumer’s mind space.
Insufficient Funds & Inability to raise capital: A lot of startups wind up due to insufficient funds after a few years of their launch in the market. Their inability to raise capital further adds to their worries with no option left, but to shut down their company, which by this time already have several employees on board.
Poor Leadership:
Startups often fail due to the wrong vision of the leader. A good leader, on the other hand, has the power to bind his team together and motivate, inspire and be with each other in times of crisis.
No Planning for crisis period:
Several startups have shut because there has been no planning by the leaders on what action to take in case of emergency. Talking about today’s scenario in the middle of the coronavirus outbreak, not only in India but across the world, startups have been forced to shut because the coronavirus induced lockdown. Most of them had not planned for such a crisis scenario, and hence they failed.
A successful startup involves a team of hardworking people, good leadership and focus to help tide through any situation.