6 Reasons Startups Are Susceptible To Failure – They Aren’t What You Think

Startups crash and burn. The end comes with a few sad tears, endless questioning, and a whole lot of finger-pointing over cocktails. The most obvious reasons for failure like no market need, running out of cash, and having the wrong team are only the symptoms of deeper issues. Existential, inherently non-quantifiable reasons for failure are hidden by these easily visible, usually quantifiable symptoms.

Is your startup susceptible to one of these often overlooked, mostly invisible causes of entrepreneurial failure? Or is your company headed down one of these paths already? Remember founders do often not accept the causes of failure even as they are moving the pinball machine out of their offices.

  • Lack of passion – You gotta believe! If you are in it for the payoff at the end then your company is more than likely going to fail. Passion breeds dedication, if your vision doesn’t move you to work late nights and shorten your weekends there is going to be problems. A founder with passion loves his idea, loves his company and most of all exudes excitement. Founders who believe so adamantly make great leaders. This keeps teams energized even when a setback occurs.


  • The team is fractured – There are countless stories of disharmony ravishing startups. If your team doesn’t share the company goals and visions from the outset, divisiveness will stop you almost before you have started. State your company’s goals and visions clearly to your team from the beginning. Then encourage team building and communication. Remember that it is your company, if someone is causing dissent or questioning decisions it is better to rid yourself of them sooner than later.


  • No fun – You have to have fun! If you don’t, the long hours and money spent is all for nothing. Starting a new business takes a lot of work. It has to be fun for you and your team. If there is no fun involved then the passion from you and your team will quickly fade. Fostering a fun work environment builds team cohesion, reduces stress, and rejuvenates creativity.


  • Too involved in the ecosystem – Over a year ago I walked into a friend’s office to see how his new company was doing. His partner greeted me with a tired smile and glazed eyes. She looked worn out and stressed, somewhat typical for someone building a company. In their small office, I could see my friend was nowhere to be found. I asked her where he was, figuring he was getting coffee or something. The answer left her mouth like fire; “He is at another meeting…”. Her words faded inaudibly into the ether of desperation that tends to be born in the offices of startups where a founder has become detached.

There is an evangelical element of the startup world that draws many founders in and never lets them go much to the chagrin of the company and its team. My friend’s company co-founder said that he often would meet 3-4 hours a day with other founders or mentors. He was also a member of several committees that ranged from growing their sector to building infrastructure for the local startup ecosystem. She finished by saying that he was spending more time in non-essential meetings than helping her develop their product and search for funding. A few months later they had failed.

Ensuring that his or her team has the tools and leadership to build a thriving company and product is the only duty of a founder. Your local startup ecosystem cannot thrive without companies like your own. Involving you and your company is important but there has to be a balance for success.


  • Cool stuff – Your goal as an entrepreneur is to produce a product or service that either solves a problem or improves upon the solution for a problem. This must be done quickly and with as little capital as possible. “Cool stuff” tends to derail many companies because of the resources and time they suck from the limited resources of a small, usually underfunded team. Shipping the product or launching your service as rapidly as possible should be the goal. Literally, time is money for any startup, except for a few exceptions. Product features and extra services can be added after your company launches. A minimally viable product will prove your concept and provide initial revenue whether from sales or outside investment.


  • Communication – The lack of communication or a poor communication style will plant the seeds of discord as fast as anything. As a founder, you have to communicate well. Whether it is with your team or with your investors you have to be able to present information in a clear, concise voice that exudes confidence and leadership at all times. Your communication style will be the driving force for all things positive within and outside of your startup. Poor communicators make poor leaders and poor leaders won’t see the need for clearly stating their message in both voice and text.

Recognizing the non-empirical symptoms of prospective dangers to the success of your startup is difficult. Most founders will do a lot of soul searching to determine if they are present. The solutions for most of these issues will take strength and fortitude because they often involve friends, emotions, and personal ownership. In the end, your team of founders identifying and preventing these underlying factors of failure will determine the success of your company.