BUSINESS - REASONS FIRST STARTUP FAILS

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few reasons first startups fail

* THEY INVENT CONCEPT,NOT COMPLETE PRODUCT.Ideas and inventions are fascinating, but consumers and businesses generally buy complete products they can actually use. There is a world of difference.

* THEY RUN OUT OF CASH.For every founder that manages to bootstrap a startup, there are dozens, maybe hundreds that run out of cash for any number of reasons: they don’t want to give up a piece of the pie, they don’t budget properly, they don’t plan for how long it takes to raise rounds of funding, their burn rate is too high, or some combination thereof.

* THE IDEA IS NOT SERVING THE MARKET NEED.Sometimes the market simply isn’t there yet. Of the surveyed entrepreneurs, 20% said their startup failed most likely because of the product market fit. The biggest mistakes startups make are not talking to enough prospects before diving in and not understanding the target market, which might result in focusing on multiple ideas rather than one main idea.

* IGNORING CUSTOMERS.The tricky question has always been whether entrepreneurs should open up shop for testing or spend a few more months making it perfect. First talk to your customers and then develop your product according to your market need. That’s where many startups go wrong.

* POOR MARKETING STRATEGIES.Many startups don’t have any clue on how to market themselves or their products to prospective customers. Well, if you don’t invest in a good marketing strategy, how then do you expect customers to get to know about your business? And if you don’t get customers, well, let’s just say your startup will fail before it starts.

* POOR MANAGEMENT.Neglect of a business can also be its downfall. Care must be taken to regularly study, organize, plan and control all activities of its operations. This includes the continuing study of market research and customer data, an area which may be more prone to disregard once a business has been established.A successful manager is also a good leader who creates a work climate that encourages productivity.