Top four reasons why startups fail – Julius Appiah writes

A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated by a handful of founders or one individual.

Micaisoft, Dream Oval, Mazzuma, OMGDigital, Expresspay among others are startups best known in Ghana.

In the past few years, obviously you might have heard about startups coming up but eventually collapsed in the long run. Examples include Jawbone, Primary Data, Beepi, AOptix Technologies, and so on.

Based on this, I took it upon myself to ask these questions, why do these businesses collapse? How do they die? What could’ve prevented their death?

Undoubtedly, below are some of the answers I got.

1. Focusing on introducing new products not on the customers

Focus only on building and not on customers.

I would like to chip in this popular quote from Ash Maurya.

The quote reads: “Life is too short to build something nobody wants”

The main concept or motive why one establishes a startup is to solve meaningful problem for consumers.

According to reports, 42% of startups fail due to the fact that they failed to solve a market need.

2. Lack of focus

One attribute of a decent business administrator is persistence; the capacity to remain steadfast even with a tempest. Much the same as Mark Zuckerberg did when the board needed to offer Facebook, or like the author of Nike when they thought about beginning their clothing line. Be that as it may, this attribute ought to be practiced with alert.

Here and there, you may be set out toward fate and your center has blinded you to the risks ahead. For instance, Jeff Bezos; with his over the top buy of littler organizations. Or then again even PayPal, when their star-wars propelled methods for sending cash didn’t work. The significant thing is to guarantee that as much as you adhere to your arrangement, you’re available to modifying it on the off chance that it doesn’t work out.

Most startups do things without knowing it will at actually move the needle.

3. Embezzlement of funds

A detailed, idiot proof arrangement is great, enthusiasm for the activity is stunningly better, however on the off chance that a business has all these and they need satisfactory financing, they are destined to flop inside the initial five years.

Notwithstanding, it isn’t abnormal for organizations to think of an approach to raise the first round of assets. One of the typical wellsprings of starting financing is the author/prime supporters. And after that we have family, companions, and blessed messenger speculators. Jeff Bezos depended on family to get Amazon running; Elon Musk sourced assets for Tesla from his pocket; and Mark Zuckerberg from a companion’s family.

4. Premature scaling

It was as of late reported that 70% of new companies scale up before they should. Although every startup’s  will likely discard the tag ‘startup’ and turn into a beneficial set up organization, this shouldn’t prompt sudden passing. Kaitek is one of such organizations that went under in January 2018 and the main thing they fouled up is that they endeavored to do excessively too early.

Typically, organizations that fall into this jettison are normally ones that don’t have the foggiest idea about the lifetime estimation of their clients, those that have a non-rehashing plan of action, and the individuals who invest excessively energy working inside the bounds of the business instead of on it.


The issue with insight into the past is that there’s a propensity to permit our affirmation inclination cloud our judgment. There are a few other conceivable reasons why new companies come up short; negative controls, awful obligations, fights in court, poor showcasing, and awful item encounter, and so forth.


The significant thing is to do enough research about the market you intend to enter and draw up an impressive methodology.

About the author

Julius Appiah

Julius has been a passionate blogger for several years with a particular interest towards science and technology. When he is not writing, what else can be a better pastime than web surfing and staying updated about the tech world! Reach out to me at: