Are you thinking that maybe someday you would become another Uber? Uber started with just a little money in 2009. But today, this company is worth billions of dollars and the owners are reaping billions of dollars, too. They started as one of the low-profile tech startups during that year. And their gain since then has been incredible. Their secret? A working system anchored on effective business principles coupled with luck.
If you are planning to establish a startup business, you have to think twice. There are 5 reasons that can cause your downfall after a period of time. Needless to say, if you can overcome the challenges by avoiding the logical factors, you may be able to grasp dramatic success like what Uber has been enjoying for years now.
Tech Startups fail because of…
1. Shortage of money
This is the main cause of all causes – failure to sustain. We all know that when you’re a startup company, your resources including your monetary capability are scarce. But you need to solidify your tolerance on this aspect. You have to find ways so that you can have a sustaining monetary balance. As you go along the way, there might be some issues that you have to address. And grasping success takes years, not just days.
Insufficient cash is one of the biggest reasons why a business dooms. This is seemingly a piece of the puzzle that a tech startup company has to surmount. A resolution process has to be done. There has to be a careful deliberation to come up with a brilliant financial plan. Being resourceful is the main key.
2. Slow growth
Most tech startup founders dream to have a $1 billion dollar company valuation after a year since the establishment of their business. Becoming a unicorn is a common dream of all. But somehow, the reality is a reversal. You don’t exactly know when. Despite this, you still have to target a dramatic financial success in a short period of time. The earlier, the better. The longer, the worse.
Sometimes, it is a dilemma to choose between being an aggressive hitter or a slow mover. But if I were you, you should be a moderate aggressive hitter. It just means that you need to have a short-term actionable plan while you also have a long-term objective and goal. If you’re just a slow mover as you’re afraid to lose the game, someone will tend to bypass you. Remember that always!
3. Fast growth
An irony. In the preceding context, I explain that it is not advisable that you act so slowly in achieving your dreams. Yes, it is definitely true. But don’t be too aggressive to the extent that you’re going to lose your own grip. Being too hard and aggressive is a common syndrome among newcomers in the tech startup industry.
Financial temptation tends to hit you so hard. That’s why you have to be moderate in your approaches and decisions. Rapid growth is not really growth as it may put you to a disadvantageous scenario. Did you hear already about the most recent WeWork’s sudden downfall? Act with carefulness and cautiousness. Simple to understand but really difficult to actualize. This is the only principle that you have to possess – don’t be shy to “SAY NO” to abrupt moves caused by temptations.
4. Wrong attitude
Attitude dictates mental and psychological behaviour. If you will just focus on building your business, then it is a wrong attitude. What’s actually wrong with this? Here’s the thing. You should not focus only on building your own business. Rather, you should be doing more for the benefits of your customers. If you’re a startup enterprise, you have to see to it that the welfare of your customers is always prioritized. “Customers first” is the tenet here.
Focusing on just how your business is going to grow, without underscoring the satisfaction of the customers is another pitfall that can trigger your business to face bankruptcy in the end. You can avoid a possible crash or letdown if you know that possessing the right attitude is good for business. And that right attitude is to focus more on your customers.
5. Unfit products
No market for your products is another thing to consider. This may be the last clear factor but it gives some important details. Creating products requires several stages before you’re going to launch. Researches (online and offline), interviews, and other possible ways to gather customers-based data are important to be done. You may fail your startup business if people won’t accept and even recognise your launched products. Sadly, some founders may think that perhaps after some time, people would value the products after the launch. This is not true at all. Most startups fail because of the wrong products introduced on the market. If you want to become successful, you have to reinvent the wheel by having products or services that are pro-customers.