Startups… It’s like Instagram of engineers and graduates and professionals with middle-age crisis – if you don’t have one, there is something missing in your life. What differs it from any kind of entrepreneurship, after all any new business is one that is started up, is that startups do not remain personal. They aim much more than a shop you’d like to open for extra income or a post-retirement plan (one that does not include any luxury, that is). They want to attract capital attention to their business and create a market or a fill one with vacuum.
The mortality rate in startups
“Startup” rhymes with some very inappropriate phrases as well and that is why 70% of startups end up as failures. One source claims that in consumer hardware such ratios rocket up as high as 97% including the zombie ones that wander, yet are hardly alive. Such high “mortality rate” would bring expeditions in any field and of course the discipline of business did not miss the opportunity.
A certain number of reasons have been determined through a survey conducted by CB Insights and there are some interesting, and equally expected results.
Why do they fail?
First things first, running out of liquidity is a problem but it’s just that. When you omit this reason out of the whole, you end up with startups either failing with customers or failing within itself as a unit of people. The highest share of failures owes to the absence of a market. This indeed is a pitfall that’s been the graveyard for 42% of the startups. Having a brilliant idea that can be produced with a very capable team on a project of which resources will not dry up might be half the success. But success is a genie in a bottle, you can’t have it with one of them missing. The genie in a bottle comes out to make your wishes come true only when there is a market for your startup’s solution. Treehouse Logic, a visual configurator platform company failed miserably because their technology, data, expertise, and advisors did not reply to a meaningful nerve bundle in the industry, hence the inevitable.
Teamwork is important
As I have mentioned at the beginning, startup business is not a personal endeavor such as opening a tobacco shop next block, it sets its sights beyond the line of sight – turning out to be a unicorn talks as much as the material value of the investments acquired. That is why a sound team of interconnected individuals can take on such a meticulous adventure. Almost one fourth of the failed startups mention the inability to bring together the right composition of a unit as their reasons.
The ex-entrepreneurs of Standout Jobs underlined such incompetency in these words: “The founding team couldn’t build an MVP* on its own […] If the founding team can’t put out a product on its own, they shouldn’t be founding a startup”.
What survived out of those startups are now among the top brands in the world. Startups keep coming in and touching our lives at moments in our lives we do not notice simply because we are so used to their existence. Still, for more of those dreams come true and change somebody’s life in some corner of the world, the very basic foundations of commerce and organization should not be neglected.