Why 90% Startups Fails & What's the Solution?

Well, I think that you click on this article because you want to become an entrepreneur and you also know that 90% startup got failed! Ok, so don't get stressed out. Creating a Startup into a successful business is really hard but not impossible! So, don't lose hope! Well, in just India Startups are in a really bad condition, only 5% Startup in India survives for 1 year and only 1% startup survives for 10years! and only o.oo1% of startups survive for 100 years and TATA which is an Indian company survived for 150 years and still their net worth is above $150 Billion and alone Ratan Tata(Chairman of TATA group) could worth $70 Billion but why this man is counted to be one of the world's richest person? because his company donates 70% of their income to poor people, medical facilities, Economic development and many more things. But you'll be thinking that how this company was able to survive? whereas 95% of startups got failed! I found many reasons why most of the startups failed.

Lack of Exact Innovation

Innovation is important but it's useful when not needed. Big companies do problem-solving innovation not just useless innovation which no one really needs. Problem-Solving means that your product should solve some kind of burning problem that society has but the trick here is that people actually don't know that the problem! After all, people were living absolutely fine without the Internet. They really never know that Internet would solve their so many problems and calm down their frustration. Big companies like Google, Facebook, Amazon, Uber etc. solve your problems. Whenever you get confused, you use Google, If you feel lonely then you'll use Facebook and if you want something from the comfort of your home then you'll definitely use Amazon. Well, this is the most common reason why most of the startups fail because they make things which no one really wanted or needed! They make useless things. Neil Patel who is a successful entrepreneur once decided to create a software which solves social media problems and investors like Neil's idea also and give him a fund of $1 Million and Neil spend one year of his life developing that idea but at the end, his idea got failed because he doesn't solve a huge problem of Society and those $1 Million got wasted and one year of Neil got wasted too...but don't afraid to fail! 

Neil Patel

Lack of Flexibility

I mean by Flexibility here that hose company who are not flexible to put an any some big thing or change in their business will won't survive for long because if you are able to create one of the biggest companies in this world but if you didn't innovate within time then will definitely won't survive. Like Kodak filed bankruptcy in 2012 but in old times kodak was one of the biggest companies in the world but they didn't shift from Film cameras to digital cameras and innovate within time and got failed. Nokia didn't use Android and missed the opportunity to innovate within time and other companies use android and become huge. If Nokia use android on that day then their value will be bigger than Apple but they missed the golden opportunity and this is because they missed the opportunity whereas in 2007 when steve jobs bring the iPhone then Nokia and other companies including Microsoft thought that this idea is stupid but people loved IOS and iPhone and other companies started to lose grip and then Nokia was sold to Microsoft and then Nokia got sold to HMD global from Microsoft when  Satya Nadella becomes the CEO of Microsoft. But...wait, Nokia is returning with android because of HMD Global. BlockBuster got Destroyed because of Netflix and Xerox got destroyed because of Microsoft and Apple. Keep experimenting because the world is changing with a rapid speed and you need to innovate within Time! 

Well, if you wanna know those companies who got destroyed because of lack of Innovation then you should watch this video.

Lack of Leadership

Shark Tank which is one of most favourite entrepreneurship show, where Judges which is also called as Sharks give investment not one the basis of their Idea but on the basis of their Will Power, Hunger for success, leadership quality and emotional power. A bad CEO or leader tends to like that a person is using cigarettes in cancer. Bad CEO destroys company quickly and behind all great company, there is a great personality like Bill Gates, Jeff Bezos, Elon Musk, Warren Buffet, Lary Page etc. Nokia got destroyed because of Stephen Elop who is the CEO of Nokia always wanted Nokia to be under Microsoft and he sold $50 Billion Nokia to Microsoft for just $7 Billion, there is no need for Nokia to get sold to Microsoft at all! A CEO should grow company higher but Elop always wanted to grow it lower. Elop has the skill but not will and without will and Enthusiasm you can no longer carry it on.

They Fight like FOOLS!

Google doesn't fight like fools, they create an Eco-System. They become a partner with everyone and share the profit which is like a WIN-WIN situation for both. Creating a system automate the company. Eco-System increases scalability and productivity in less time and many startups trying to compete with every company but you need to collaborate as much as possible to create an Eco-System in which people depend on each and then every person will try their best to promote your company. Google is an eco-system, In Google, bloggers are dependent on Google and Google is dependent on visitors and visitors are dependent on Blogs to get help. 

Lack of Clarity

Many Startups doesn't even clear what is the vision of the company which cause their end in just a couple of years or months. Their Vision is not clarified and doesn't know why their company exist. Clarity is power, it gives your company a direction to move and succeed. Many big corporations have clarified their Vision like Amazon, Apple, Google, Nike, Facebook, Oracle etc. 

Amazon's Vision Statement: Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.

Google's Vision Statement:  “to organize the world’s information and make it universally accessible and useful.”

Vision will give you a clarity of your goal and prevent your company to do useless things. 

Turning Feedback into Feedforward

Many Startups fails because they don't convert feedback of customer into feedforward. Well, your first product is never your last product, you have to continuously improve it within time. Customer feedback is like a Gift, catch it before someone else does. Your first product is just for experimentation and you have to convert it within time. Burbn was a heavy online application with almost 10 feature but people use only Photo feature and then 9 features got removed from Burbn except for Photo feature which people uses the most and nowadays you know Burbn by the name of Instagram! Facebook didn't become successful in the first attempt, it was an online dating site where you rate girls and boys. Don't take your product as a product, take it as a project. Involve customer in your product and adapt changes according to the situation of the market. Your first product is just for Pilot, experimentation and validation you don't know what is going to happen with the product, so test it with a low-cost funnel and then start to invest a high amount of money. Well, after all, Mark Zuckerberg take high risk in facebook after seeing the success of Facesmash.

Monopoly

Well, in 2017 Airlines companies earned a profit of $17 Billion from $700 Billion and Google earned that same amount of profit from just $50 Billion. This is because Google is a monopoly and there are so many companies in airlines which cause more competition and less profit but whereas there is only a little competition for Google and that's why Google owns 89% of search engine industry. Greatest billionaires ever lived like John D. Rockefeller monopolized an entire industry and the net worth of Rockefeller was $336 Billion adjusted to inflation and known to be as the second richest person of modern history but this is because he monopolized the oil industry. Building a Monopoly is very hard for startup especially because of lack of seed capital and manpower. So, I think that space companies would become a monopoly if they are the one only able to extract resources from other planets and big corporations like NASA and SpaceX is already in the space but the first one could become a monopoly. Coca-Cola is a monopoly because they don't share their secret recipe with anyone and keep it secret. Just as like KFC doesn't share colonel sanders 11 herbs recipe. 

They follow the OLD methodology 

A startup is based on assumptions not on Data and there are higher chances that those assumptions could get wrong. The old methodology of business work for old and big companies but not for startups because the startup is completely based on assumptions and you should try your idea with low-cost budget and then if it got to succeed, then start to take higher investments from investors. Webvan is a startup which got 3,500 employees including world's best engineers and delivers food to customer window within 30 minutes and builds their route almost perfectly that they got $400 Million in just starting but after 3 years they filed bankruptcy losing $800 Million. Webvan got failed because they thought that their assumptions would become reality without even testing which cost them bankruptcy. So, you need to test your idea with a low-cost funnel and if the idea got succeed then you should start to take a risk on it. You should take a calculated risk. A startup should focus on a search, not on execution because after all it is just based on assumptions.

So, ok that's it guys don't forget to share and subscribe and don't get afraid to fail because Biggest companies got started from scratch

I hope you get motivated by seeing this. So meet you Next time!