TOP 7 Reasons Why Startups Fail in 2021

  • Done Kirov
  • 25 Feb 2021

Building a business from the ground up is not an easy task. There are a lot of factors that must be taken into consideration in order to ensure the success of the company. Many startups don't have the required knowledge needed to grow and they make a lot of mistakes that are detrimental to the success of their business. In this article, we will go through 7 of the most common mistakes that lead startups to failure and that every startup owner should avoid at all cost.

1. Poor marketing

Many entrepreneurs believe that if they create a great website and offer interesting products and services, customers will flock in front of their door and drive profit through the roof. What they fail to see is that without a well-developed marketing strategy, no matter how good your products are, nobody will be able to see them and you won't attract many customers. As a business owner, you must know your target audience, understand their needs and find the optimal way to present yourself to them. If you fail to do this, your startup will never be able to succeed.

2. Insufficient funding

A big reason why startups fail is because they run out of money. One of the biggest roles of the CEO of a startup is to figure out at the very beginning how much money the company will need to get started and how much more will be spent until a milestone is reached, a point at which the company makes more than it spends. If the company doesn't have an estimate of the funds it will need, and if it doesn't have a plan about securing the needed funds, it will quickly go bankrupt and fail. Because of this, it's crucial to make the calculations at the very beginning and find a way to fund your startup.

3. Ignoring customers

A quick and sure way to lead a startup to failure is to not listen to your customers. Many startups fail to gather feedback from their customers and have no idea what the customers actually want which causes customers to abandon them and look for better options. Instead of spending too much time focusing on your products and rolling out new features, it's better to listen to your customers, understand their needs and get an objective review of your products and services. After all, it's the customers that make the business, without them, there's no business at all.

4. Lack of teamwork

A fatal issue that occurs in a lot of startups is discord among the cofounders or the members of the team. Teamwork plays a big role in the success of a company, and if the teammates don't coordinate and don't work together, the company will quickly go downhill. When building a startup with other people, it's important to communicate with them, to discuss any issues that may arise and to establish clear roles among the different members. Only by working together and in harmony can a startup become successful and prosper.

5. Pricing issues

Pricing is very important when it comes to growing your business. A lot of startups overestimate the value of their products or fail to deliver up to the customers' expectations. When pricing your products and services, it's important to understand the market, to look at the prices of your competitors and assess the demand for the goods you're selling. No matter how good you think your products are, if your target audience cannot afford them, you won't have any profits, which will result in a certain failure of your startup.

6. Lost focus

Losing interest in the business and getting distracted by side projects or personal issues is a major contributor to the failure of many startups. Entrepreneurs usually get started enthusiastically, with a lot of excitement for their startups and after a while lose focus of what's important. This can lead to inconsistencies in the products offered, insufficient customer support and a variety of other issues. Because of this, it's very important to establish your vision at the very beginning and never lose focus of what your company is working towards.

7. No market needed

One of the major problems that startups run into is there being little or no market for the products they are offering. This can be either because of wrong timing or the lack of a compelling reason to cause customer to purchase those particular products. Essentially, startups that try to solve problems that don't need solving and that nobody cares about will most certainly fail, since there's nobody interested into their services. Because of this, it's important to choose to build the type of products that customers really need to have and that will bring some kind of value to the market.


Although there's a lot more to be cautious of, these 7 mistakes are the ones that cause most startups to fail. Recognizing these mistakes and avoiding them will greatly decrease the chances of your startup failing. If you have just started a business, or you're planning on starting one and don't want it to fail, our team is here to help you with that. We offer a variety of services that will get your startup off the ground and ensure future success. From web development to search engine optimization and logo designs, we have everything your startups needs in order to grow and expand. Contact us to find out more information. We really care about the success of your business.

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