18 August, 2009

10 reasons why startups fail

1)      They run out of money. They are too optimistic about when their product is going to be accepted by the market

2)      Founders don’t have complete faith in each other. They fight instead of delegating, trusting and verifying.

3)      CEO hires weak team members. Strong CEOs sometimes try to carry everyone with them.

4)      They want to do too much. A successful startup finds a narrow niche that they can dominate and then expands.

5)      They go after too small a market.

6)      They don’t charge enough from their customers to survive. They often think their mentors/investors are their customers, and think that a nice sale is all they need.

7)      They hire too many people up front.

8)      They get unlucky. Competitors, new technologies, et al.

9)      They don’t work hard enough or fast enough or smart enough. All those little decisions add up to an outcome.

10)   They don’t take enough risks. Some startups think they should operate like big firms. They can never beat MS or Google at their own game. They should get creative and do things differently, even at the risk of embarrassment.