10 Mistakes To Avoid As A Startup


Either you succeed or you learn! This is the mantra we all might see around, in and every startup we walk in. It is always said to be a learning opportunity in startup even if you fail. But, no matter how much we take the game positively reality is failing sometimes sucks.

According to a survey conducted by Statistic brain in the US for examining the startup businesses found out that almost all the new ventures fail: 50% after five years and 70% after 20 years. Their study found out that 46% of all the companies in the US fail due to incompetence. That category together includes everything from no experience in record keeping to non-payment of taxes. The other 30% fail due to lack of managerial experience, followed by 11% failing due to lack of experiences in the line of goods or services.

Why does the startup ship sinks?

While we all know one or the other stories of exceptional startup ideas that failed, we need to look deeper in order to analyze the reason behind the failure. CB Insights studied 101 startups “postmortems” — you know, those Medium posts Founders do when their company goes under — to analyze the most common reason behind startup failures.

On basis of their findings, here are the top 10 reasons why startups fail:


Over Analysing Market Need

One of the major reasons that a startup fails lies in their pre-product research and analysis. Creating a product that the market doesn’t need will guarantee failure. It is important to understand that as much importance lies in finding out your target audiences’ view towards the product you are aiming to create. Do they think it will solve the problem? Will they really invest time and money in the solution? Answering a few basic and need-based questions can actually help you in evaluating the results you are hoping for.

Investing a dollop of money in without proper research, chances are will lead you to the road you lesser expected.


Cash Flow Imbalance

29% of almost all startups fall prey to the situations of shutting down business even before reaching anywhere because of either low cash management or inefficient planning.

Money is the basic need for any business. Effective cash flow management is necessary to maintain a healthy business environment. A lot of businesses after learning from same are opting for online invoicing software, that helps you in managing the entire invoicing for clients in one place as well as managing the day to day business activities. It lets you create and send invoices in time, reduces efforts and enforce required to do the complex task of generating invoices. Artificial intelligence based online invoicing software is meant to create invoices with simple clicks and guide you with simple tasks in business.

Read More: How to Manage Cash Flow for SME’s and Startups


Deciding the right price

Setting the right price for the product is always a crucial decision. A lot of marketing research books have been written in order to explain the right path in setting the price for a product. Sometimes, still, startups and new minds fail in analyzing the right price for the product. 18% of all startups fail even before becoming big ventures because of the initial steps are taken to the wrong path.

Asking simple questions before setting the final prices can actually help in getting the decision right. Do you get a huge number of signups, then you can maybe raise the price? Does no one respond, then you need to lower the price? Can you meet your company’s costs while simultaneously meeting that sweet spot of not too expensive and not too cheap?

Unfortunately, one reason why many startups fail is that they are unable to. It’s a conscious act, any tipping to either side can lead to failure of the organisation.


Poor Product


As good as the idea seems to be, the product sometimes could fail to reach your expectations. The gap between your idea and the actual product made could be caused through several reasons. Misunderstanding the market, over analyzing the needs, Over evaluating customers’ demand etc. can be some of the few reasons behind a poor product.

It is important for the owners to invest in the right amount of money and efforts in researching and evaluating the market before actually creating the product. Adding a few features or modifying them according to needs can actually help the owners in striking the right chord with consumers.


No Business Model

It is of utmost importance for any business organization to have a business model. They can be tough to work with but are very, very necessary for the success of a startup. 17% out of all the startups failed because they didn’t realize this importance soon enough.

Business plans are generally 20-30 pages long and require quite some time to be drafted. They typically cover every single detail about your business, starting from its objectives, goals, and missions to the kind or variety of products you offer. It also explains, in brief, your target audience as well as your idea of growth.


Lack of marketing skills

“Anything will sell if you know the right technique to sell it.” It is a saying not even said by many but also practiced by many. If you are capable of either fulfilling a need or creating one for your audience, your product will then succeed. The main reason behind the failure of many great ideas is the poor marketing technique.

No matter how great your product is, it’s going to fail if no one knows about it. Poor marketing is a major reason a lot of startups fail. It is not always necessary to have big brilliant minds deciding your marketing techniques initially, but simply tried and tested marketing can do wonders. Spreading the word may seem a waste of time, but it is fundamental for a business to survive.


Understanding customers’ value


As soon as a startup realizes the importance of its customers, it will then grow even faster. Customer feedback is important in the startup journey, from the first germ of an idea to product development and testing.

These days, startups should try even harder to create and communicate value in everything they do. Customers these days have an overwhelming abundance of choice available to them in the market. They have high expectations and little loyalty to spare if you fail to meet them. It’s very much a buyer’s market these days.


Mistimed Product Launch

Almost 13% of startups fail because of product mistimed. They either launch it too early for the market to be prepared for it or too late that the users have already got hundred other alternatives.

Any idea works great if the launch can make a massive difference. Carefully analyze and decide the right time for launch.

The best way to create a stir in the market with your product is by creating a pre-launch hype about it. Invest your time, money and efforts to aware people about the kind of product you are about to launch. Keep the guessing game on and there you go. As successfully you will able to create a hype the more performing your product will be.


Shifting From Main Focus

Building a company takes time, effort, money and — focus. If you’re the one who gets distracted easily or you have trouble keeping up with what you started, your startup might end up being a part of the 13 percent who fall under the above-failed startup category.

To do something big, you must dedicate a huge amount of time and effort. Remember: if you want to do something great without failing on the road, your best ally is to have focus! Forget the advantage of first movers, focus on who is still standing after the war.


Disharmony Amongst Team Members

You know how it can sometimes be a terrible idea to actually shift in with your boyfriend? It seems like a great plan — you love each other! You love spending time! They’re pretty clean! — but when you actually move in together, you might end up losing them because you were right now not ready to take this big shift.

The same kind of strife can also happen when you decide to work together with your close friends or partners in a startup. Your ideas might clash as well your working style. Any disharmony in the initial stages of a startup can actually make you suffer the consequences. A lot of startups had to shut down because of the unsuccessful partnerships, creating a big impact on the businesses of many.

Startups, these days, to avoid such circumstances are following the path of having a set working environment. They try on assigning some specific tasks to the employees who already wear multiple hats for them. This way they can easily track their work and avoid wastage of efforts. Online available softwares such as Invoicera is being used widely by companies to do two of their most important tasks. One is invoicing and the other is managing work efficiently.



No one ever starts a business with the aim of shutting it down one day. Therefore, the decision needs to be made after closely analyzing the market and a complete research before launch. It is important to invest time, money and efforts in pre-launch research in order to have a better decision-making process. The above 10 points should be kept in mind and all the possibilities should be made to avoid them in order to run a successful venture.



Veronika Tondon is a business enthusiast with extensive experience in Invoicing & Payment Process. She has 6+ years of experience in Invoicera, the leading cloud-based invoicing solution as Invoicing Consultant. Sound knowledge in business process execution, offers end to end solutions for complete automation of business processes and AR/AP processes. Contact Veronica for your invoicing requirement.

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Veronika Tondon is a business enthusiast with extensive experience in Invoicing & Payment Process. She has 6+ years of experience in Invoicera, the leading cloud-based invoicing solution as Invoicing Consultant. Sound knowledge in business process execution, offers end to end solutions for complete automation of business processes and AR/AP processes.
Contact Veronica for your invoicing requirement.

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