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Why do start ups fail?
Yes I do agree there are lot of problems which ensure start ups fail, it could be fight with in founders, not getting good talent, taking time for product, or not getting sales as projected or having cash only on paper and not in account, due to payment realization taking time the list goes on and on.
The major problems which ensure start up fails in realistic terms are as follows
1) Running out of cash: This seems to be the major problem, and this problem is very realistic in nature, you may have the product or service which is next big thing, but staying alive to see that your product or service becomes next big thing is the most important question. Payments get delayed by non paying customers or delay in funds due to various reason which are not in your control. The account goes zero in spite of having big dreams, the reality is you need to pay the team and employees, who are with you for the sake of earning their livelihood and they do not think the way you think, you cannot tell them to hold on till you get funds. Paying rent of the office. These ensure the company close even before it make big.
2) Ramping up sales: When start ups are founded by technical guys or techies who are in full control of product, but this alone will not ensure that success comes to it. As the product also needs to be sold and revenues to be generated. Lot of problems come in from it wrong market segmentation, or pricing in wrong manner, or spending too much of time for perfecting the product and spending too much on product development. The sales is altogether is different ball game altogether which many times technical founders do the mistake. They do not anticipate actual difficulty in doing sales, which ensure that high projections are kept in terms of sales to happen, numbers being multiplied on excel and actual to happen at ground zero lot of difference happens. Slowly interest is lost thinking that product didn’t deliver or sometimes it is too early for the market.