Home Article And Opinion 4 Common Reasons Why Tech Startups Fail!

4 Common Reasons Why Tech Startups Fail!

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The failure rate of tech startup companies is quite disturbingly high. Even though the people starting, managing, and running these startups are inherently talented, educated, and skilled, there are something seriously wrong with how

They run a tech startup. Some of the reasons deserve a mention here:
1. Problems within the Management Team
If the management team of a startup is unable to deal with initial problems that every company inevitably faces, then it gravely increases the possibility of failure. Therefore, you should make sure that your management team, no matter how new or small, is able to devise strategies, plans, and solutions out of every difficulty, no matter how disastrous they might seem.
Signs of a weak management team are that they get stressed very easily usually end up hiring the wrong people just to fill in a position without thinking about the long-term effects of such a decision. If you see these flaws anywhere in your management team, it’s time to take serious actions against such practices.
2. They Ignore The Role Of Marketing And Advertisement
No company can last long without a viable marketing plan. Every organization needs to pitch their products and services in order to increase their leads and multiply their sales. However, many tech startup entrepreneurs don’t give much attention to the marketing and advertisement of their products and they rather rely too much on word-of-mouth publicity.
Eventually, this turns out to be a costly mistake. With the advent of social media, it has become significantly easier for any startup to promote their products and expand its reach to thousands of customers each day with little to no additional cost.


Tech startup teams need to realize that marketing and innovation are what set a brand apart from their competitors. Hence, a tech startup must get involved in customer engagement and pay attention to their reviews, comments, and queries.
3. They Fall Short Of Cash
Many startups start their business, only to run out of their initial investment very quickly. Hence, they end up shutting down, as they cannot find enough sources of revenue or finance to keep them going. Most new entrepreneurs also have very little idea of how to budget.
To avoid this potentially fatal mistake new companies should make sure that the proper operating resources are available, as well as a couple of backups ready in case of emergencies. They should also ascertain that customers with debts are made to pay up on time and in full. Running a company requires a lot of confidence to even get your due right, so it is the time that one stops spending unnecessarily and demands their money when it is due.
4. They Invest Money On An Idea That Is Not Commercially Viable
With several new tech startups blossoming and withering every day, a new tech company should look upon itself and the idea it stems from. Is the idea clear cut, unique, innovative, and useful? There is such a thing as a bad idea, so make sure you aren’t just offering useless or meaningless products just for the heck of it.
Wrapping Up…
The setup for tech startup companies is quite demanding and risky. While the reasons listed above are general, they could greatly help tech entrepreneurs to better handle their startup companies, as they would know what to expect with their current resources.

One should always keep in mind, however, that the reasons for failure could also come from within the specific situation of the startup itself. Therefore, an inside look is always an important step in determining whether one should even consider a tech startup or not.
Author Bio: Liana Daren is a Business Consultant, Social Commentator, and a Blogger. Apart from that, she provides online coursework help to struggling students all around the globe. She also writes romantic stories, and novels. You can connect with him on Google Plus.

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