Why Startups Fail




According to research, 1 in every 5 million non-funded startups gets to the unicorn status. This means that the startup is valued at at least $1 billion. For every funded startup only one in 10,000 becomes a unicorn. This means only 1% of startups looking to et funded actually get funded.

Below we highlight the main reasons why startups fail.



1. Your product has no market demand

Most founders and entrepreneurs believe that their product or idea is so appealing that the market will consume it. In the beginning stages, most people do not understand what their product might be (or not) able to achieve in the market, especially during the early days.

The solution would be to first test out the market. Make sure there is a need for your product. If not change the course to satisfy another market. Ensure that your product is a market viable product (mvp).


2. Ignoring and not avoiding cash burn

Many startup founders and entrepreneurs want to build a perfect product or solution and launch after that, but when the startup is relatively new, one needs to cash in so as to keep the company afloat. Important things to check at this point in time would be low-profit margins, small recurrence purchases, cli