A Startup is the dream of an entrepreneur in which a particular or group of persons invest their valuable years of time and money. An entrepreneur gives everything of his or her life that a startup takes and still 99% of the time, It fails. If we particularly look at the internet based startups the failure rate is 99.97%. It means almost every internet based startup fails. The failure rate is up to 99.995% for the developing countries like India, Indonesia and Russian Federation. The entrepreneurs always blame the unavailability of money and resources for the business failure but if that's the only reason of failure then never the established companies like Nokia, Tidal and Atari was failed. However, the unavailability of resources and money is one of the biggest reason of failure but it's not the only reason of failure. The most common reason for business failure are as follow:-
The biggest reason of startup failure is the lack of business Opportunity. A startup which doesn't have a good marketing strategy, even don't have good service and support, still can earn a lot of money if it has a single thing and that is Demand In Market. We need the depth market research that whether the world needs the particular startup or not.
If the business idea is originated from your own mind rather than inspired by another idea or copied from some other existing business then the failure rate will not be more than 70% for this kind of startups. A Startup which fulfills the existing market demand have more success rate rather than a startup which creates the market demand for its business
Sometimes your idea is really great but the required resources and liquid cash is not enough to implement the same. These days many established companies of world are facing the problem of liquid cash unavailability and that's why the startups try to get funds from bigger venture capitalists rather than going for a small investing group or individual financier.
The technical failure is most common failure among internet business startups. Sometimes, the idea behind the startup is a really great. The startup also gets the required funds from biggest investing groups but they chose the wrong technology to implement their platform and got failed. In the last decay, the startups which adapted the technology of Microsoft have more failure rate rather than the companies which are using open source technology.
Case Study:- The market leader Nokia chosen Windows Os for smartphones but the small company of that time Samsung chosen the Android (An Open Source Software Of Google) for smartphones and Everyone's know the result. The Nokia completely failed and Samsung is the new Market leader in smartphones market.
The poor management skills of the company affect the quality of services and by doing that they may loose the unremarkable image of their brand name. If there is competition in market and the end user have number of options for a particular product then the company which have better management and marketing skills will win the race.
A Great leader will always be a successful person in his personal and professional life. If an entrepreneur doesn't have good leadership skill then the startup will always pay for that. The great leadership skills will always helps us for Getting A Particular Contract or To Impress The Investor.