No clear Vision/Mission Defined
This is the first and the foremost factor. The people do not know what they want to do as an organization. This happens because there are thousands of organizations already and have their market share. And these companies have touched almost all the areas of the businesses today. The dreams of founders have to be very clear and defined. The vision has to be very very unique and gets attention of the people. So define clear vision and the mission before thinking to start up a business. The customers always think how I am going to benefit out of your business and the customer has to be convinced.
Selection of Wrong Line of Business(LOB)
The world is changing very fast. Everyone knows this fact. And as I said earlier, there are already companies touching upon almost all the lines of businesses. There is nothing like a particular line of business is wrong and other line of businesses are right though. Its all the strength of initial organization team and their expertize. No business is wrong, however it so happens that tending to have business because a particular business is well doing in the market but the start up team do not have sufficient capabilities required to execute it. Understanding the strength of the initial team is every essential and accordingly the line of business needs to be decided. Having a dream of inventing a new Search Engine simply means that you need to compete with Google, Microsoft, Yahoo!. Making a new iPod requires you to compete with Apple. A thorough market study might be helpful to choose a line of business.
Failing to identify the Target Customers
Failing to know who will be using your products will certainly result into failure. Identify the targeted customers for the business. Once the customers are identified, its crucial to talk to them to know them better and more importantly what they want exactly. It may so happen for the start ups that let us start building the products and people are there buy. This is just an assumption and not realistic. So define targeted customers.
No Regular Rhythm
For the start ups there can be lot of obstacles on their initial way. Discouragement is the factor. A real leader or boss will just surpass these obstacles. The team has to strongly believe that the kind of the business their company is going launch adds value the customers in some way. This must constantly be given revised. Challenges must be beaten by having regular rhythm in the selected business and stand up to that business. This makes the targeted customers believe in your business.
Not having a Strong Online Presence
The online presence is the face of what the company is doing. This has to be very impressive. Define clearly the vision and the mission over the web. Define why should someone want to approach you. I have seen several start up companies' websites with very limited information about their business and not clear what exactly they want to do. Most of the start up companies will have a 'Get in touch with us' or 'Contact us' page where they are going to ask certain information about the user without letting him/her know what they are going to do about that information. If this is the case there are less chances of people giving their information to the start up company websites.
No Right Location
The area where the business is going to run is another important aspect sometime. Preferably the location has to be considering the kind of your customers that you are dealing with and where the required resources are available to the preferred cost. Mostly the location may not matter as long as you impress your customers. However the companies need investors, and you can have them by carefully selecting the location. Its less likely to have investors outside that valley than being inside. Have a look at Startup's Location Still Matters
Disagreement among the People
A good entrepreneur is the one who resolves the internal people crisis. There are chances that certain people from the team being discouraged by the company business and tend leave it up. Its nothing better than having like minded and enthusiastic people before even joining the hands. There has to be common understanding between the people and strive towards the company progress than just throwing different opinions and disagreements about the business and its progress.
Failing to Delight the First Customer
There could be hundreds of reasons why start ups fail, however all those may not necessarily be the failure causes but its your customers. It may not really matter what is the location of the company if start ups manage to make their targeted customers happy for the first time. The customers can be disappointed by several factors such as product pricing, product availability at the right time. Especially for product development company there is something called a 'Market Window' and the product must be released within this window. In case the company crosses the window, there could be another competitor with even better production functionality. Its crucial for start ups to bring their output to the customers at the right time in order to make the customers happy. A word of mouth takes your further.
Conclusion
We can list several such reasons why start ups fail. However the key factor to understand is that the core idea on which the entire business is going to revolve around is realistic or not. How the idea bring in the advantages over other existing products. The best idea could be study the drawbacks or the gaps in the existing systems and think how those can be filled by the new business. Its all passing initial hiccups, ups and downs. Once the customers start believing your brand of products, you have won. This is how the company brand promise is built.
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