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Top 10 reasons why start-ups fail
By Kukil Bora, SiliconIndia | Tuesday, 01 March 2011, 16:40 Hrs |
7 Comments
Bangalore: Have you ever wondered what makes entrepreneurs a rare breed? It's because very few start-ups actually triumph in their endeavor. According to a research done by the U.S. Bureau of Labor Statistics, nearly six in ten businesses shut down within the first four years of operation. This is surely abstemious for anyone tempted to invest their time and personal savings into launching a new business. So what are the factors that turn out to be the obstacles in keeping a new business afloat in the perilous waters of the entrepreneurial sea? Mentioning below are the top ten reasons that, if not avoided, can sink a start-up.
1. Ignoring customer feedback
For most start-ups, tunnel vision and not gathering user feedback are fatal flaws. If you ignore your users, it will be a tried and true way to fail. Listening to your customers, and more important, acting on the feedback they give is one of the best ways to transform a struggling business into a successful one. Customers are ultimately the ones responsible for the company's paycheck. By listening to their needs and desires, you can tailor your product and service to better meet their demands.
2. Poor management
In most cases, new business owners don't have relevant business and management expertise in key areas like finance, purchasing, selling, production, and hiring and managing employees. It can soon lead them to a disaster. Poor management also results in poor strategic thinking. To avoid that there should be a regular study, planning and controlling of all the operations of a start-up. A successful manager is the key element in a successful company, because he or she is responsible for creating a work climate that encourages productivity.
1. Ignoring customer feedback
For most start-ups, tunnel vision and not gathering user feedback are fatal flaws. If you ignore your users, it will be a tried and true way to fail. Listening to your customers, and more important, acting on the feedback they give is one of the best ways to transform a struggling business into a successful one. Customers are ultimately the ones responsible for the company's paycheck. By listening to their needs and desires, you can tailor your product and service to better meet their demands.
2. Poor management
In most cases, new business owners don't have relevant business and management expertise in key areas like finance, purchasing, selling, production, and hiring and managing employees. It can soon lead them to a disaster. Poor management also results in poor strategic thinking. To avoid that there should be a regular study, planning and controlling of all the operations of a start-up. A successful manager is the key element in a successful company, because he or she is responsible for creating a work climate that encourages productivity.
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Reader's comments(7)
1:
Not only that, if it is a partnership firm , the intergrity and ego among the partners and shareholders also plays a vital role in supporting/suspecting the working directors.
Posted by:Dr. Sudha
- 03 Mar, 2011
2:
I find the Article to be a copy from a Book... Wake Silicon India ...or your name would be Silli Con India
Posted by:Frustrated
- 02 Mar, 2011
3:
Silly Con India .. ha ha
anonymous coward Replied to: Frustrated
- 03 Mar, 2011
4:
No offence, but the writer seems to have taken a rather academic and amatuerish view to the issue
The basic reason for startups failing can be summarised simply by Nash Equilibrium. If individual wants become more important than group wants any startup would fail.Its only when the core group realises the importance of individual compromise in order to benefit the group (which in the long run benefits the individuals as well), that any startup can operate. You require not the best brains but the best buddies in a startup
The basic reason for startups failing can be summarised simply by Nash Equilibrium. If individual wants become more important than group wants any startup would fail.Its only when the core group realises the importance of individual compromise in order to benefit the group (which in the long run benefits the individuals as well), that any startup can operate. You require not the best brains but the best buddies in a startup
Posted by:Gaurab Banerjee
- 01 Mar, 2011
5:
Nowadays I feel, clicking the Siliconindia news letter and reading the top articles is posed to be a waste of time. Titles of most of the articles published are attractive to make us to click on it, but the contents are like artificially ripened fruit.
Varghese Replied to: Gaurab Banerjee
- 01 Mar, 2011
7:
Its all about money which silicon india makes out of members either by conducting seminars (paid) or certification (like you can see here (java course). good idea actually. :) Majority articles are drafted.
Indian Replied to: kiran
- 02 Mar, 2011
Beautiful and dress selection, please go to Dresses
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