3 Major Reasons Tech Startups Fail
Wondering why tech startups fail? Earlier, we listed out some tech startups that you can explore this 2020 and a few tips on how to start. But right now, we would like to give you reasons why your tech startup is failing! So stop whatever you are doing right now and get prepared to drop your old thinking and embrace a new one!
1. Aiming at short term goals and ignoring long term goals
Believe it or not, even if you say you are thinking long term but are still focusing more on short term goals, you may be making a mistake. Every decision you make now should be with respect to a long term vision. Building a business that can stand the test of time is never going to be easy, but if you want something, you fight for it! The goal is to leave all the unnecessary goals behind and focus. You are not the only person trying to build a credible business that can stand the test of time, but you need to make yours stand out.
When you consider a tech startup, your goal should not be;
- Making money in one day
- Being a boss and not doing the work
- Becoming a successful world known business in a week.
Be different, most people do not start businesses to solve problems, they start businesses to make money almost immediately and thus, start setting very unrealistic goals. When those unrealistic goals are not attained as expected, they get discouraged and lose focus. The beginning is always hard and long, but with time and hard work, everything will fall into place!
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2. Starting with the wrong product and services
Your responsibility is to target your market, solve a problem. You have to carry out a proper market survey and have a strategy along with your product. With tech startups, guesswork is not an option. If you do not determine if your product or service is right for the market in time, you are headed for disaster. Tech startups require both skill and market analytics to survive in a very competitive market. Adopt the Lean Startup Methodology that means
First, build a product or service, offer it to a few users, see how they can interact with it, ask what they like, what they dislike and how you can improve your product or service. Use these analyses to build a product that will suit the market and that will enable you spend less resources and build a better product/service.
3. Mismanagement of funds
No matter how much revenue and startup cash you raise, without a constant means of generating income that keeps the startup running, the startup will eventually fail. A typical human being believes that when you raise money, your business will definitely be successful and that is a huge misconception. Mismanagement of funds is a key reason why major tech startups fail. The biggest mistake you can make is spending money on the things that are not necessary. When it comes to tech startups, a lot of people like to believe that only skills will do, but if you do not manage funds properly, the startup will definitely fail. Many tech startups did not fail because they did not have brilliant ideas or because they did not stand out, they ran out because they did not to have cash.
Which of these reasons are you familiar with? Have you been guilty of any of the above? If you have, 2020 is a good year to start over!
Make wise decisions today!