3 Reasons why start up Fail!

Every crisis creates new opportunities and most likely for start-up and medium size business, where you can turn and create with flexible and agile team and product an increase in the revenue like 600 unicorns’ start-up that made it through the 2020!

The Pandemic has challenged the high-growth ecosystem of start-up tremendously across the globe, with majors’ changes. Many aspiring companies have gone under during this crisis, which was a direct result of the pandemic, while there are about 475 active unicorns in the world with a value of more than $1.394 trillion combined.

As expected, like many other business impacted, the most significantly impacted at the start of lockdown and cannot see any light out of the tunnel yet , are those relying on customer footfall, like  retail or leisure and entertainment.

If we have a close look at the main reasons why the start up in the last year failed , we can mention the key ones which made the down fall very quick for them.

1/ Strategic alignment or how to balance optimism with realism

On the operational side, as you know start-ups often take a while to get their execution right, primarily because of founder overoptimism. it is necessary to be optimistic so you can create a new product or service but that same optimism could create issues and challenges when decision need to be taken , which blur the owner and get in the way of good judgment.

It is crucial to balance between optimism and execution, as many entrepreneurs or business owner can relate to, and agree that it takes one to two business-building cycles to achieve it .

2/ Building an agile mindset or how to turn a crisis into an opportunity !

In any business risks are known or expected  and of course, as owner it is essential to minimize these, also  there are also unknown and unknowable risks that are more akin to black-swan events, which are impossible to prepare for.

The COVID-19 situation is  one example, and it is clear that  that a business agile mindset has nothing to do with software development or scrum methodologies, an agile mindset is about creating and responding to change in uncertain and turbulent environments which were currently living in , and for start up , it is about thinking through how the product or service could be modified the new context or  shifting market needs to a complete transformation of the business world.

It is essential that the leader and the team stay focused  and positive, they should not give up, the leadership team has to take ownership, acting thoughtfully and professionally, inspiring others,

 3/ Process & tracking or how you create performance

Money isn't everything and resources may even play a more significant role in determining success of a business such as a partner that supports a start up or any running business  operationally can actually be more valuable than a big funding round.

 The success of a business depends on a number of factors. One of the factors is the ability to understand and analyse the data and different processes that business is performing across departments such as sales, marketing, administration, accounts, and more.

If these factors are not measured, a start-up will continue making the same mistakes that it has been making. Fundamental business metrics are important indicators and signs for a start-up to take action and change their processes if needed.

Overall, it is very important to understand that running a start up is based on critical factors and more likely to fail when the business goes through big changes or crisis like the pandemic because it creates a butterfly effect on the customer behaviours and the economy that impact the ecosystem dramatically , unless you are ready to jump and adapt fast !