Why?
There are a million reasons why a startup may fail. There has been much research done on this topic – and this week we cover some of the most common.
NOT MEETING CUSTOMERS’ NEEDS
One of the most common startup failure reasons is not meeting customers’ needs, not listening to them or even ignoring them.
In fact, according to private equity firm CB Insights, 9 of the top 20 reasons for startup failures are customer-related.
Their research states that the number one reason why start-ups fail was “no market need.” In other words, there was no customer. In the post-mortem of Treehouse Logic, a visual configurator platform company, it wrote, “Startups fail when they are not solving a market problem...We had great technology, great data on shopping behaviour, great reputation as a though leader, great expertise, great advisors, etc, but what we didn’t have was technology or business model that solved a pain point in a scalable way.”
Online social game startup GameLayers expressed a similar sentiment, blaming product design that didn’t meet customers’ needs. A founder wrote, “Ultimately I believe PMOG lacked too much core game compulsion to drive enthusiastic mass adoption,” he observed. They needed to “make something that was easier to have fun with, within the first few moments of interaction” instead of getting caught up in more ‘abstruse’ features.
NOT HAVING THE RIGHT PEOPLE ONBOARD
Sometimes failure was the result of not having the right people on board. 7 of the top 20 startup failure reasons cited by CB Insights were related to the people and/or culture of the company.
This story is from the Issue 17, 2021 edition of SME Magazine Singapore.
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This story is from the Issue 17, 2021 edition of SME Magazine Singapore.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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