Startups get bombarded on all sides with dire warnings of their imminent doom. With adages like “fail hard and fail fast,” “75 per cent of startups will fail,” etc. it’s not too difficult to see how startups might feel the odds are stacked against them.
But why exactly do startups fail? A recent article from Mashable outlines 16 reasons why startups bite the dust. We’ve drawn out four of the most important. Follow the link for the full list.
1) Waiting too long to launch
Too often, startups will keep building and building their product, tweaking it until it’s loaded with extra features and settings that most new customers don’t actually need. Those “simply aren’t crucial to success or failure … that means they were wastes of time – you could have done 10x more with that same of amount of time and resources,” says Jonathan Wegener, founder of startups Timehop and ExitStrategy.
Founder Kathryn Minshew of The Muse agreed. She says the Minimum Viable Design might be a little ugly, but it’s important to get a new product to market quickly and make sure it’s tested.
2. Hiring poorly
New hires need to understand how much work they’re getting themselves into when they begin working for a startup, says Kellee Khalil, founder and CEO of Lover.ly. Employees are going to have to “wear many hats” and go beyond their typical job descriptions.
It’s also worth considering hiring people in accounting, finance, and other support functions. Otherwise, as a founder, you’ll be doing all of that yourself – and those are “things that aren’t critical to growing your company,” says Matt Salzberg, founder and CEO of Blue Apron.
3. Obsessing over funding
It’s easy to picture fundraising and getting lots of venture capital as a way of defining success. But Claire Mazur, co-founder for Of a Kind, disagrees.
“If your business makes money, you may well be better off not fundraising, and in doing so, retain control and ownership of your business. And if your business doesn’t make money (or have a solid plan as to how it will), then perhaps there are some bigger issues to tackle before you start pitching investors.”
4. Getting Distracted By Feedback
“A startup is not a newly democratic nation state: Not every decision needs to be made by the collective,” says Elizabeth Scherle, president & co-Founder of Influenster. So while some advice may be really helpful, others might not be so good. In the end, any decisions you choose to make will be your call.
“Keep in mind that people will give you feedback based off of their market knowledge and domain experience,” says Allison Beal, co-founder and CEO of StyleSaint. “It is your job to apply that knowledge to your company without losing sight of your vision.”