Top 5 Reasons Why Startup Fail – Innovation District 92

There are many reasons why start-ups fail but the top five reasons identified for startup failure are:

No market need:

Poor identification of market needs or the market timing is wrong as well as get out competed if there is a need discovered which makes 61% of the total factors of failure. You could be ahead of your market by a few years and they are not ready for your particular solution at this stage.

Running out of cash:

Running out of cash & other cost issues are about 29% many startups run into problems when they have insufficient funds to cover their operations, resulting in a short runway.

Not the right team:

Weak management teams make mistakes in multiple areas of approximately about 23%. It is essential to have a right team to achieve a particular goal and establish that startup.

Get outcompeted:

When you build a better product than existing offerings, large companies or new startups will enter the space and take away your market share which makes 19% of the total failure,

Cost issues:

Pricing is always a challenge but for startup it is about 18% of why they fail. It is constant compromising act between pricing high enough to maintain healthy margins and cover operating costs.