Top 5 reasons for startup failure
A startup can be undoubtedly called the buzzword of the century. People have started to believe in the thought that building your own startup is their only possible way of becoming a billionaire. However, not all startups succeed like facebook, amazon, Snapchat etc. It is actually seen that 9 out of every 10 startups fail! Here are the top 5 reasons why most startups fail, with some relevant case studies.
  1. Not having a proper business model: Having a well-analyzed business plan is the first and foremost thing a startup should have. The business model should include why they are building their startup, what is the product and how they are going to sell and reach to the people. The business model should have a proper revenue model and also how they are implementing the supply chain.At times founders assume that because they will build such an interesting web site, product, or service,  customers will beat a path to their door. That may happen with the first few customers, but after that, it rapidly becomes an expensive task to attract and win customers, and in many cases the cost of acquiring the customer (CAC) is actually higher than the lifetime value of that customer (LTV).
  2. Not doing proper market research: Market research is a crucial thing in building a startup. As a founder you might think, I have an idea of a wonderful product, this should work. But in reality, the market is quite mercurial. Customers change their minds very easily. So, without doing proper market research, you may never know whether people would actually pay for the product. It is a futile project to build a product that nobody wants.
  3. Not marketing the product the right way: Marketing your product is the only comprehensive way to make your products known to potential customers. But, firstly, you should identify who your target customers are. A very classical example of how marketing creates a huge difference in the case of rocket and Bkash : Rocket ( Firstly coming as Dutch Bangla mobile banking), had a solid foundation being part of one of the most reliable banks of the country. However, they marketed their products portraying a garments worker and their lifestyle and thus made the marketing a lot niche. People of all classes thus couldn’t relate. On the other hand, Bkash came with an advertisement people of all classes could relate. A lower-middle-class wedding in a village and situations that arise in all of our life made us realise the urgency of using Bkash, which rocket failed.
  4. Not having a proper team: Many experts consider the startup team is the most crucial part of a startup. If the team members don’t have proper understanding amongst each other, they will not be work with each other for long. Pathao had been successful because the team members had an amazing sense of understanding amongst each other, which dates over 10 years.
  5. Not being able to adapt: Eric Ries model of Lean Startup is very popular amongst startup founders, which states the importance of having a minimum viable product. But a core concept they miss is that building the minimum viable product is not everything, they need to adapt it with time. In this mercurial market, if you don’t make necessary adaptations, your startup is bound to fail.

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