Why Tech Startups Fail

The advent of the internet has seen the rise of multimillion tech companies. Almost all unicorn companies have a humbling background and it is always interesting to speculate the next big startup. As much there are successful startups out there, the majority of them will fail even before they break even. There are a couple of factors that will lead to the failure of tech startups and we’re going to highlight some of them.

Failure to Pivot

Founders are usually obsessed with the product and it can be hard for them to see the bigger picture. A good startup should pivot away from a bad hire, bad product, or bad marketing concept the sooner they realize that things are not going their way. Being married to a bad idea can take away everything you’ve worked hard for. It can also be hard to push a product when you’ve lost interest. That is why it is crucial that the founders are passionate about what they’re developing.

Burn Out

There is always a tricky life-work balance for those that are involved in a startup, especially when it is just starting out. Most founders will spend a considerable amount of time on the company and will not pay attention to their social life. According to statistics, burn out has been attributed to causing 8% of startup failures. It is important to get the balance right when working in a startup so that there are issues down the road. There is a common misconception, especially in Silicon Valley that building a successful company requires sacrifice. You’ve probably heard stories of Tesla CEO Elon Musk working for up to 14 hours a day. Not taking enough rest is a guaranteed way of suffering from burnout and you don’t want to be the reason for the failure of the startup.

Investor Interest

investor invest

For the startup to be successful, it will need the initial funding which comes from investors. Most tech startups fail because of insufficient funding or lack of funding. As much as one could be passionate about a particular product or service, the bills don’t for themselves at the end of the day. It could take a while before the company breaks even. That means that salaries and expenses will need to be paid.  Founders should keep operational costs at a bare minimum. There is no need to rent an expensive office when an affordable one will just be as effective in doing the job. You will be competing against companies that might be heavily funded.

Product Management

It is crucial that you’re moving with the pace of customers. You don’t want to develop a product that has no use. You also want to get the right timing when it comes to launching the product. It is possible to be ahead of time with the product. It doesn’t mean your company is worthless. It might be hard to commercialize your idea. It is also wise to check out similar products in the market so that you can value proposition. You could check out the Web Scraping API developed by other companies so that you can have an idea of what is expected from such a program.

Ignore Customers

One of the biggest mistakes that a startup can make is to ignore the needs of the customer. Taking a customer-centric approach is almost guaranteed to provide a competitive edge over other companies in the same niche. Most startups will spend way too much time on perfecting the product while forgetting the reason why they’re building it in the first place. You need to go out and talk to customers and find out what they need in a product. It easy to make the assumption that you’re developing something that is cool while in reality there is no demand for it at all in the first place.

Poor Marketing

poor marketing

Marketing is a critical component to the success of any startup. The internet has made launching a business easier than ever before. You can start with a small budget and scale depending on the success of the campaigns. You need to make sure that you’re choosing the right agency for your marketing objectives. Such an agency should have a thorough understanding of the product or service that you’re offering. Knowing your target audience will help in developing bespoke marketing campaigns. For marketing to be effective, there should be a product that is adding value to the customers. It is only then you can go for aggressive marketing. Make sure that you’re not scaling too slowly or quickly, even with the marketing campaigns.


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