Why most tech start-ups fail?

Today, everyone can become entrepreneur. A great idea can be converted into business. Perhaps, tons of ideas become reality when execution happens. But why most start-ups fails?

I’m a fan of start-ups since then and I have been watching small businesses shut down as sustainability becomes an issue.

I will discuss common reasons why failure is a magnet of the new tech start-up business.



Capital is the bread of your business venture. When you run out of cash, you are no longer capable of supporting the operations cost involve. Keep in mind that human resource constitutes the biggest chunk of your budget allocation.

Most of the times, when you venture into tech business – you will test the water. And when you see that you can acquire customer base, you will for sure confident that you can sustain the business in the long-run.

When the product reaches out the market, some start-ups are quite excited to add more features to the solution but they sometimes neglect raising capital as they grow. At this point, they need funding so they most likely would tap in to the Venture Capitalists (VC).

Venture Capital is the common route of the start-ups. If they convince investors to put money on their start-ups, they are able to expand and sustain their growth. But VCs are becoming demanding these days forcing these little businesses to stretch out and these start-ups begin to lose focus on their goal why they exist.

Product is not a “requirement” of your customers

Product not a requirement

Are you solving the pain that customers are facing?

If your customers can live without your product then you probably need to think about it. At first, you may be able to acquire customer base but you may lose them if they think they can ‘live without you’. Like accessories, a ‘good-to-have’ so it is only trivial to your customers.

Before launching the product – there should be enough market research to see if your solution will ace the market. One prominent example is pre-launching the Minimum Viable Product (MVP). This ensures that you are really solving customers’ problem as the goal is to lay down basic functionality of your product and then innovate as you go along.

Marketing is weak


Marketing! Marketing! Customers are like employees – you can acquire them and lose them at times. Some start-ups fail to recognise that when customers are becoming unsatisfied – they maybe at risk.

There may be a dedicated team marketing their products but the strategy may not sit well with the customers. It does not only mean to acquire new customer base but to upsell. Seeing opportunity inside is your best bet. As it is easier to sell on the upfront of you existing customers. That is why most established firms organize meetup/business townhall to their customers annually.

Not right people

people resource

People are at the core of your business. When the ones implementing your solutions are incompetent, you may need to review how they manage the day-to-day operations.

The success of your start-up is highly dependent on your employees’ performance. You may need to review how your team perform and execute. Or probably, you have to evaluate yourself.

No unique differentiation

When you enter a market that is saturated, you would probably be a small fish in a big pond. You compete with everyone else and your customers can easily bargain with your competitors.

If the solution has no unique features if it enters the most common business domain – the tendency is it will fight against the ‘established’ products. Your business needs to stand so review what your competitive advantages as compared to your competitors.




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