We are currently living in the era of self-believing approach and the entrepreneurship wind is stronger than ever. But, still, not everyone becomes a successful entrepreneur or able to turn a startup into a million-dollar company. Although there are books available in the market revealing, secrets of “how to seed a billion dollar startup”. There are also a number of alluring seminars from the leaders sharing their mantras for success. However, even after open mantras and tips from the people who have already made it, most of the startups fail.
Every startups begin their journey with the goal to turn into a successful organization. However, most of them eventually run out of the money only to increase the failure count in the statistics. There are multiple factors that are responsible for a company's depreciation capital and overall worth.
They say ‘you learn from your mistakes’, but why to make it in the first place when you can learn from others? This means we have researched the reasons explaining why most of the startups drown while some take over the waves.
Why Do Startups Fail Or Why Your Startup May Fail?
In Spite of having a unique idea and putting hours of hard work, most of the companies fail to make it to the finish line. There could be many reasons behind it, but according to a survey from FastCompany more than 75 percent of the startups are backed by venture-capital fails. Another survey conducted by insurer RSA shows that 50 percent of the startups get dissolved after 5 years, where 70 percent of the companies fail after 10 years. More than 42 percent of the startups fail because of not producing what market actually need.
The core reasons for the survey includes the mistakes done by the startups that led to the failure. The mistakes include:
- Lack of focus
- Losing commitment and passion
- Considering opinions from the wrong sources
- Raising unnecessarily heavy funds too early, and
- Absence of a good mentor
All these mistakes point towards lack of leadership as all the above are the responsibility of the founder and the person driving the startup.
The person holding the decision-making power is responsible for a company’s future and growth. The leaders need to be very cautious and serious about every small and big decision they are about to make. An entrepreneur is the driving force of the company. He or she needs to convert an idea into a massive amount of effort. As Hari Mann, a successful entrepreneur and lecture at Ashridge Business School say, “Entrepreneurs need to understand it’s not about innovation, it’s about implementation”.
Reasons Behind Successful Startups
When you look out for the numbers of successful startups that have made their way through the odds you will find very few. But, these startups have proven that it is not impossible to achieve the success. There are a number of research and studies available showing the reason behind the success of such startups. But, the Startup Genome survey shared by Compass (on 650 startups) provides the most comprehensive data. According to the survey there are some common behavior patterns and success indicators that kept these startups alive and growing over the years.
- Commitment from the leaders that kept the company and its employees passionate about the work.
- Being Flexible with the time and ready to accept the change quickly following the market needs.
- Always listening, reading, and learning from others including competitors.
- Having a clear vision about the goal to avoid any kind of diversion along the path.
- Dividing the final success into shorter goals to avoid being over ambitious and running into wrong decisions like raising money more than they needed.
- Keep learning, reading and growing every single day with the aim to improve individually.
However, there are a number of factors (other than what is mentioned above) that you need to practice to guarantee your startup’s success. Moreover, the reasons mentioned above only indicates where you need to emphasize while working hard. Use these researched and surveyed data to boost up your startup growth and make sure to avoid mistakes.
