Why 90% Startup Fails: 5 Reason to Learn

Failure is the stepping stone to success. Yes, you heard right, This proverb suits everywhere, In life, In real life Challenges and even in your career. Being an entrepreneur, I understand the word Failure. 9 out of 10 startup gets failed, This is hard bitter truth. But when you get up once again to fight the challenge that is the mark of a good entrepreneur. You must learn from the mistake and avoid the reason of Startup Fail.

Startup Fails

When you round up the reason of failure then you came to know that this silly mistake or blunder you have done. Whether Your business is running online or Offline but goal must be clear with making money to leading the industry. Today we will see 5 Reason Why 90% Startup Fails.

#1. Product Has No Market

This is one of the major reason of startup fails. As per Fortune Magazine, 42% startup fails due to this reason, This is the top reason of startup fails. They make the product no one wants. More than 42% startup agree on this that they made the great product but there is no market for their products.

If you spend time on making the product then you must spend time on the doing research that you are making right product for the right market.

Entrepreneur or Startup is not what you know you can make the product but you have to make the product on the based on customer demand. Product with no market has no value and it will get fail only so Before making product fight out the right market.

#2. Not the Right Team

Many start-ups end by saying that “We won’t have Right Team”. Right Team is one of most important part for any startup. Approx 23%-25% startup failure reason is not having the right team.

Why they have the wrong Team? Why they hire the wrong person who makes their dream project to die.

You have a great product with the great market then also your startup get an end and all because you can not hire the right person or unable to make the right team.

How Can You Make Right Team?

To make right team how have to hire right person who be with you at any time.

  • Prior experience -This play important part. One must have few knowledge of startup it is bigger advantage.
  • Founder- Founder or Co-Founder play Important role in making the company successful. They must discuss with their team even he/she know everything.
  • Talents – It is obvious requirement , You can not hire a person without Talent.
  • Dedication and Focus – Your team must belief in your Idea, They must share same dedication and Focus like you or any team mate.

Job distribution is good for the startup but being dependence on them is wrong. Startup can also fails if You have great products or Even you have great team.

Eventually an Startup can die due to overlooked key aspects of business process and the “boring stuff.” or Even due to Your team management.

The CEO thinks, “It’s my job to lead.” The CMO thinks, “It’s my job to market.” The lead developer thinks, “It’s my job to code.”

Make great team be proper management will make your startup success.

#3. Run Out Of Cash

This is one of the most common and frequent reason for any startup who died. Approx 25% startup came to end due to their business came to running out of cash.

But Why they Run Out Of Cash?

One of the reason that they can not able to scale up their business as fast as they expected.

If Your startup grow fast then you can bypass some of biggest startup killer like losing to the competition, losing customers, losing personnel, and losing passion.

How Can You Overcome When You Run out of Cash?

  • Know Your Zero Cash Date – Be aware when you are going to be out of cash.
  • Do Small Experiments – Raising fund from investor or VCs is really tough, They loves data along with long term goal. so start doing little experiments while raising the fund and collect the data to show them.
  • Planning – When you know the last date then find out maximum possibility how to run longer and longer possible before any funds come.

Running Out of cash is one of biggest and most common problem but you have to only figure out how to come out of this.

#4. Poor Product

Well this is not most common reason for startup failure but it is one of them. Many startup fails as they unable to understand the Customer point of view. They won’t know whether customers are able to use the products or not.

Your product must be user friendly and Customer know all the benefits of the products so they can use it more easily. Get proper feedback every time and make changes as per the requirements.

#5. Lack Of Business Model

It is most important for any startup to have clear Business Model plan. Many failed founders seem to agree that a business model is important.

If you have Great product and lack in business model is going to make your startup end. You have to make Proper Business Model plan with Plan A and Plan B. You have to keep eyes everywhere how to scale with how to raise the funds to make the business run for long terms and make it successful.


These are the few common mistakes done by the entrepreneur, which results them to end the startup. Hope you like it and please share your views in comment.

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Author: Prem Ranjan

Hello, I'm Prem Ranjan, I am tech blogger, loves to write on SEO, Digital Marketing, and Travel Experience. I am writing on web for more than 3 years. You can check my blog YTechWeb.