Published 20 March 2018 Published: Entrepreneurs, SMEs, Startups, Business

Why Startups Fail

Imagine a lonely island in the middle of a vast sea. Imagine tropical fruit plants like canopies covering the half of the island, a calm beach where the waves are gently drenching the sand, where the sea is kindling its own symphony, and an azure sky with tiny cotton-clouds. The island is called SUCCESS.

The life on the other side of the sea is quite interesting. You can see many people gathered by the seaside. The blood is boiling in their veins, and their muscles are ready to fight. You can feel it that they gather there for a reason. Those people are startups, and they have one goal: to reach the island.

Some start to learn about swimming. They read books, ask for advice from others, study success stories of Olympic champions, buy swimsuits and snorkels. And they never touch the water. But when they jump into the sea, they drown.

Others, who are professional swimmers, quickly throw themselves into the water. And when they are about to reach the island, a giant shark appears and eats them.

Another group starts building boats. Some cut the trees, some hew the wood, others give it a shape, some manage the work. In order to be effective and quickly reach the destination, everybody in the team is given an oar. When the boats are ready, everyone gets on the board, and the boat sails to the island. But the boat barely moves forward, as everyone is steering their oars in different directions, and the boat gets stuck.

Seeing the failure of the previous, a group of men start building a ship. It takes them a lot of time to complete the construction but they are sure that nor the wind, neither the sharks will stand between them and SUCCESS. Hardly have they crossed the half of the distance, when the ship runs out of fuel, and gets stuck in the middle of the sea.

The fifth group comes up with an unusual solution: to build an air balloon. First, the team gets proper training to be eligible for building the balloon, and after they get all the necessary materials. Finally, they are in the air flying and getting closer and closer to the destination. Suddenly, a strong wind emerges, and the air balloon changes its direction, never ever reaching to the island.

Now let’s analyse the reasons behind the failure of each group: The startups that put a huge amount of time on building a product are so obsessed with the process that they don’t pause and evaluate. What they get in the end is a product that people don’t want.

Professional swimmers are those startups who have developed a great product that everyone would want. But guess what, they created something that already existed in the market and didn’t innovate. Then they are knocked out by their competitors and quit the game.

Boat-builder startups are quite experienced and offer a unique solution. However, they face a common mistake: poor management.

Ship-builder startups are those who have quite fair chances to reach the island: they are innovative with good managerial skills, they plan and measure the risks, and most importantly, they offer a unique product. Nevertheless, they run out of fuel. The fuel can be either the financial resources as they invested most of it into product development or lack of continuing innovation.

The scenario of the fifth group is quite similar to ship builders: unique product, organised and trained team, sufficient resources for further development and innovation. But their solution wasn’t great. Because they weren’t flexible. This is another common reason to failure because when a product is launched, and customers don’t approve it, the startup isn’t flexible enough to come up with a better version.

As you may have already guessed, these are some of the reasons but there are surely many of them. Unlike other types of businesses, startups are quite risky business, and only 1 out of 10 usually lands on SUCCESS island. But this shouldn’t discourage you from moving forward. Just keep this inspiring quote by the bulb inventor in your mind:

“I have not failed. I have just found 10000 ways that won’t work” — Thomas Edison.