Why did many startups fail?

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Why did many startups fail?

Why did many startups fail

The startup can be interpreted as a newly developed company. The startup is usually small and initially funded and operated by its founders or one individual.

Startup companies offer products or services that are not offered by other parties or are believed to be the founder offered in an inferior manner.

In the early stages, startup company expenditure tends to exceed income because they work to develop, test, and market their ideas. That way, they need funding.

The startup can be funded by traditional small business loans from banks or credit units, government-sponsored loans, or funds from non-profit organizations, and the central government. Friends and family can also provide loans.

The startup is believed to change the face of the business and technology today. Even though there are several stories about the success of interesting startups and inspiring, countless startups fall free.

Why does Startup fail? Many factors cause this. Entrepreneurs are ordinary people who try to start a business and have an impact on the technology industry. The idea that looks promising at this time may no longer be profitable when offered to the public.

9 of the 10 startups failed. This is not a fact that is easily accepted, but this is the thing you need to pay attention to. Even entrepreneurs need to plan their failures before starting a business.

Why? Because entrepreneurs who are very optimistic need to see the reality that happens both today and later. These statistics are not intended to scare you, but to encourage you to work smarter and harder.

Various causes of startup failed

Various causes of a failed startup must be watched out for. Here’s the explanation.

Problem on the market

One great reason why the startup company failed was that they had a small market or no market at all for the products they wake up. Here are some general symptoms:

  • There is no good proposition value or a good event, which can make buyers commit to purchasing. To get an order in the current conditions, you must find buyers who have an interest or desperately need the product you have to offer.
  • Wrong marketing time. You can be the leader in recent years but consumers are not ready for the specific solutions you offer at this stage.
  • The market size of people who need products and have money is not large enough.

Business model failure

One common cause of startup failure is entrepreneurial too optimistic about how easy it is to obtain customers. They assume because they will build websites, products, or interesting services, then customers will come in droves.

It might happen to some of the first customers, but after that, it became a heavy task to attract and win customers. And in many cases, prices to obtain customers are higher than the value of the customer itself.

The essence of the business model

A simple way to focus on problems in your business model is to see these two questions:

  • Can you find a measurable way to get customers?
  • Then can you monetize the customer at a higher level than the price of his acquisition?

Not solid management team

The general problem that caused a failed startup was a weak management team. A good management team will be smart enough to avoid the reasons above. The weak management team made mistakes in many areas:

  • They are often weak in strategies, building products that have no buyers because they fail to work to validate ideas before and during the development process.
  • They are usually not good at the execution stage, which can trigger problems with products that are not well-built or on time, and towards poor market execution of its implementation.
  • They will build a weak team below them. There is a saying: Players A hiring worker’s A, and B players can only hire players C because players B don’t want to work for other B players. So the company will end up with weak and bad execution.

Lack of funds

The reason Startup failed further made the company startup failed because they ran out of money. The CEO’s key task is to understand how much money left is good for the company’s operations for financial success or a positive flow of money.

Errors that often occur and trigger companies running out of money are management fails to enter the next stage of development, before the money runs out. Although it still allows to repeatedly get money, the valuation will be lower.

Inappropriate acceleration pedals

One of the most important tasks of CEOs is to know how to set the accelerator pedal.

In the early stages of the business, when products are still developed and the business model is represented, the pedal needs to be set very lightly to make money. There is no need to hire many marketing and sales staff if the company is still in the product settlement position to the point where the product meets market needs.

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This is a very common mistake that will only produce frustration and startup failure.

But on the other hand, there is a time when it finally becomes clear that the business model has been proven, and the accelerator pedal is time to tap harder. As hard as a source of capital available and in the company. For people who first become CEOs, it’s not easy to know how to react when they reach this point.

Hiring known people, not a competent person

Many startup companies are small businesses. It can be understood if the owner chose people with family closeness. And he did this by hiring people who were referenced to him by close friends, relatives, or other family members.

For most people, the reason behind this is because they want people who can be trusted, people who don’t steal from the company. Unfortunately, this decision ends as a mistake. As a startup, you must hire a very competent person. If not, they will tear down your business without the need to steal from you.

Problems with Products

Another cause of the failure of the startup company is because it fails to develop products that meet market needs. This can be due to simple executions or due to strategy problems that have no suitability between products with the market.

Often the first product that starts to the market does not meet market needs. Some revisions are needed so that the product can be following the market. In severe cases, the product can fail. If this happens, it is a clear indication that the team that works does not validate their ideas with customers before and during the product development process.

Less connection

Some entrepreneurs often complain about the lack of networks and connections of investors in the industry that can support them. Apart from they failed to find new people who could bring their startup towards success, they also failed to recognize their network.

Startup companies need networks with good connections through existing networking, which is very easy to build.

Another right way to build connections online is to work with PR and SEO agencies. They have had relations with media, newspapers, and some upper-level blogs that can voice about your startup company.


Starting a startup is not just about focusing on someone’s business alone. If the startup wants to survive in the future, they need to avoid distractions but don’t forget the competition.

Most startup companies currently feel that their ideas will best guide them to success when the product is launched to consumers. But it’s not so.

The startup is formed from time to time and the idea can be similar. Analyzing markets, competition, and businesses that have been formed will help produce different strategies in different areas to win the market.

Ignore prospective customers

It’s always difficult for startup companies to decide to improve the product better or let the market test it first. Talking to customers about the idea of ​​increasing the product can be a good thing, but this triggered startup hardly had a profit at all.

The foundation of startup success is based on market validation and if you fail with a good product, your startup will fail. The possible best way to make sure all goes well is by measuring, tracking, validating, and optimizing the data you receive from customers or clients.


The idea of ​​being a spine behind the startup and extensive analysis of the market needs to be done before starting a business. Entrepreneurs need to understand that starting a company, marketing, and spending a lot of budgets may not always end up with success. Dive into a business without previously analyzing the target prospect of the market is not a good idea.

The current consumer market varies greatly. Demands and needs change rapidly, and the successful startup currently works with a vision without ignoring the reality of the market now and later. Required future analysis when implementing ideas for a startup.


The location can be a problem on several sides for startup companies. The important thing, adjust between your startup concepts and location. The location also plays a role in failure for long-distance teams. If your team works remotely, make sure you find an effective communication method, because the lack of teamwork and planning can trigger failure.

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Remove the product at an inappropriate time

When you release a product too early, the user is not useful, and getting them back can be difficult if the first impression they have about you is negative. And if you release a late product, you lose the window of the opportunity on the market.

Not flexible and not utilizing feedback from customers

Ignoring customers is the cause of failure. Do not collect feedback from customers so a fatal mistake for most startups. Don’t wait more than 3 months to get feedback from a very objective prospect.

Similarly, it doesn’t spend enough time to talk to customers and release features that you consider good, but you don’t collect enough input from the client. You are easily stuck by thinking of your good item. You must pay attention to customers and adapt to their needs.

Poor marketing

Knowing the audience’s target and know how to get their attention and turn them into leads and finally being plastic is the most important skill of a successful business.

Get to know the characteristics of a successful startup company

Now let’s move on to successful startup characteristics, what is it?

Start with a small market

When talking about a successful startup company, many of which comment on the importance of having a large market.

Indeed, the startup must slowly reach a large market to become a large company. But at first, it was best to start with a small market. Start from a small market and then develop the market into a concentric circle.

The biggest mistake you do as a young entrepreneur is getting into a large market. This indicates you have not found the right category. And you will deal with too many competitions.


Still related to starting in a small market, another characteristic of a successful startup is the focus. When starting a company from the start, especially with a very small team, you are easily tempted to take too many projects, this can kill your startup.

Provide an amazing user experience

By definition, a startup means a new company. They cannot rely on brand loyalties built for years as competitors can do.

This is one reason why it provides useful and easy-to-use products is very important for long-term business success.

Positive culture

If you want to be a winner, you need to adopt a positive corporate culture. A successful startup must be able to provide a positive environment at all levels of their organization.


Poor communication can cause startup failure. Poor communication raises tension relations between the service and between you and customers. A successful startup can overcome communication barriers.

Employ appropriate employees and respect them

Winners know how to find, choose, hire, train, motivate, give rewards, and maintain good employees. They avoid workers who don’t contribute. They raise the level of employees who do the best for the team.

They also know how to make employees happy and productive. A well-known business builder carefully supervises employees who like to travel in herds. They are good, respectful, motivate, and very supportive. This unique character is a strong character of entrepreneurs who deserve to win.

Objective oriented

Entering the business world requires strategy and planning. Successful businesses are regulated using a system with a constant short-term goal evaluated. With a system like this, businesses and business owners can identify and achieve success. Strategic planning is an important element of each business design.


Running a startup is not an easy matter. There are only a few people who are ready to travel ahead. The startup that successfully can overcome various obstacles. Most importantly, never lose your vision or passion.

Customer service

The value of customer service cannot be underestimated. Many successful startups can get attraction because of excellent customer service. If your customer feels appreciated, they will come back again and become a customer repeat.

Excellent customer service is difficult to imitate, which is an effective tool to win the competition.

Even though there are elements of luck involved in a successful startup story, there are many successful factors of a startup. They have products that meet needs, they do not ignore anything, they grow rapidly, and successfully overcome competition.

If you have this characteristic, you are preparing to succeed. For your business to grow and increase the number of customers you don’t forget to advertise through the Froggy Ads service, you can start by advertising your product, so that later you can improve visitors in your online business portal. FROGGY ADS is an online advertising service that can help you control all your product campaigns. Helps you target the targeting target you want and give you many choices to market your product.