The main reasons for startup failures

The main reasons for startup failures. Why some projects “die” even at the implementation stage
A startup today is perceived as a promising project that can bring benefits, but a significant part of them ends in failure. Some projects “die” even at the implementation stage, others encounter insurmountable difficulties already in the process of work.
The main reasons for startup failures
To prevent such a development of the situation, it is necessary to understand what problems startup owners most often encounter and how to avoid them so that the business becomes truly successful.

Reasons for failure
Most of the reasons are on the surface, but for some reason they are not remembered during the analysis process even before the launch of the project.

The most common reasons:

* Lack of interest in the idea from consumers or potential investors. Over time, the market situation may change, and with it the relevance of the offer changes.

* Lack of funding. Any idea can only make money if there are funds for its practical implementation; without this, the most promising startup is doomed to failure.

* Disagreements within the team. An equally common reason is when several organizers are unable to agree among themselves to divide positions, future income, and so on.

* High competition. Entering market segments with a high level of competition always turns out to be problematic; it is necessary to search for niches where it is still possible to easily grab a piece of your own.

* Pricing problems. Inflated prices for your own product or the inability to lower them due to high costs lead to a lack of demand from potential consumers.

* Failed product. Not every created product finds positive responses among the target audience; even the most promising development may remain ununderstood.

* Lack of business model justification. Ignoring the requirements to calculate costs and potential revenues in advance leads to the emergence of projects that are economically ineffective.

* Marketing problems. The wrong choice of marketing promotion strategies, which does not allow reaching the target audience necessary for success, does not make it possible to achieve the necessary sales volumes.

* Errors in working with clients. In any business, the client has a central place; it is he who pays the money. Errors in building relationships with him lead to a lack of incoming cash flow.

* Late entry into the market. Any innovative idea has its own life cycle, and the latecomer always loses. The market is already divided among others, the client is no longer delighted with the product, and so on.

Other reasons for startup failures that are less common, but still relevant today:

* Loss of focus. It is necessary to constantly understand the vector of your development, quickly adjusting it taking into account the changing situation in the external environment. Time mismatch will cause problems.

* Conflict with investors. Capital owners have their own interests, which do not always coincide with the opinion and position of the project authors. The emergence of disagreements can become the basis for the withdrawal of funds from the project.

* Lost idea. A departure from the original idea and philosophy of project implementation can become a reason for its gradual dismantling. This will not happen instantly, but quite quickly.

* Lack of interest. Successful implementation of a startup is possible only due to the great desire of the authors of the idea to achieve results. Lack of assertiveness does not allow you to achieve results.

* Geography errors. Often, the way to implement a promising idea is to ignore geographical nuances, such as climate, culture and traditions of the population, language differences, and so on.

* Loss of interest by investors. The switch of capital owners to other projects that are more promising for them leads to a financial shortage and the collapse of the startup.

* Legal errors. Incorrect preparation of legal documentation for opening or running a business and other problems related to legality are guaranteed to bury any prospect.

* Insufficient use of connections. The implementation of any project requires wide publicity in society and promotion, including through existing formal and informal connections.

* Team burnout. In this case, we are talking not only about the emotional component of the activity, but also about the professional one, for example, loss of competencies or inability to learn new skills.

There is also a whole layer of problems that can lead to the failure of a startup, which lie in the immediate organization of the business. Among them it is worth noting:

* Errors in organizing the work process, work schedule, and so on. For example, a transfer to remote work can destroy even the most established team that has existed since the start of the startup.

* Errors in choosing a strategy. At first, strategies should be as simple and implementable as possible, and only as experience is gained

and perhaps their consistent complication.

* Errors in calculating capabilities. Excessive optimism when considering one’s possibilities for implementing what is planned leads to collapse; there is not enough money, people, or skills.

* Lack of experience. According to statistics, a good leader grows out of a person who has previously ruined several projects due to his own mistakes and lack of skills. Only a few succeed the first time.

* Errors in resource allocation. Resources “our everything” and their improper distribution can lead to disastrous consequences. If one or the other is missing, the result will be disastrous.

* Problems with personnel selection. The need to ensure a balance of theorists, practitioners, leaders and simply “pulling horses” is a difficult task that not everyone can cope with.

How to protect a project from failure
First of all, before the start of implementation, any project must go through a justification procedure. Only after you have data on planned expenses, revenue and payback periods can you begin practical work. It is necessary to take into account not only the optimistic, but also the pessimistic scenario for the development of the situation; you can encounter unexpected problems even where you do not expect it.

Secondly, you need to start your own project if you have experience, even if not as a manager. Improve your level of knowledge, rely on a scientific approach, it always allows you to achieve better results. If possible, it is necessary to select a team of specialists; the more experienced they are, the better.

Thirdly, you should not rush and strive to achieve everything at once. It is necessary to use the MVP model when work begins with achieving the viability of a product of minimal complexity. In the future, you can set yourself more ambitious goals. Due to this, it will be possible to move away from theoretical developments in favor of practice, analyze demand, and select the optimal marketing strategy. Due to this, it will be possible to op