After years of working with customers from different sectors and businesses of various sizes, we can identify the root causes of reasons for failure. In this article, we will especially take a look at startups in digital services. But, the analogy of startups can be also used for failures in large companies and corporations. As service providers, we are helping our customers to avoid the product, delivery, and technology-related risks. Let’s learn how to avoid failure from our own failures.
Top reasons for failure
- Lack of market need (42%)
- Lack of cash (29%)
- Wrong team (23%)
- Too much competition (19%)
- Pricing issues (18%)
- Poor product (17%)
- Business model (17%)
- Ineffective marketing (14%)
- Not customer-centric (14%)
- Poor timing (13%)
These reasons for failure are not only valid for startups, but also for projects in larger companies. The difference is that a failed project is usually one of many, but a failed startup can hardly be sustained.
The magic triad
The first part of the magic triad is a story, you call it vision. There must be one visionary for each project, product, and business. No visionary in the company leads to a doomed business. More than one leads to a mess. Imagine the bible – it’s a perfect example of storytelling and promoting of vision to a broader audience.
The second part is the craft – the practices that will bring you success faster. This means to do your job right – as subject matter expert and manager.
Both of the above are underpinned by the right data that is translated into fuel for your business. Your business must make more than it consumes. Otherwise, it dies, as any species would.
The underestimated part isn’t unnecessary having a vision. But why do 99% of startups fail even if they have a vision? Because of a lack of craftsmanship, mainly managerial skills. Not lack of managers 🙂 As a managerial craftsman, you need to have experience – at least 10 000hrs and experience.