Why most entrepreneurs fail in their first Startup??

"Starting a Company is like Eating glass and staring into the abyss"- By Elon Musk\

No doubt we all want freedom in our life and that's the reason people drive towards Entrepreneurship where they can implement the ideas which they think can bring a change to the world. But bringing a change to the world comes with a Cost that every Entrepreneur has to pay. This cost can be paid through a huge loss of money or time or relationships or health and sometimes all together.

I am an entrepreneur since the age of 25 and have seen many rifts throughout the journey of Entrepreneurship. During the initial period of Entrepreneurship, it felt like success is for granted but when you dive deep into the ocean of your business journey then you realise its not easy to get into the shoes of Entrenpreneurs. You need to have a high risk taking capabilities and unlimited perseverance.

A data study shows that 21.5% startups failed in their first year, 30% in their second year, 50% in their 3rd year and 70% in their 10th years. The exact reason for the failure is uncertain but my personal learning during this whole journey has led me to the conclusion on why Entreprenuers fails mostly in their first startup and they are listed as follows:-

1. Lack of Market Research

Every Entrepreneur came up with an idea and start building a product on the same but in the starting they don't give much thought on the market research. Lack of Market research led them building a product which in later stages is of no use for the customers and none of the customers willing to pay for their services. Its very often in this domain. So before even you start a product you should think of the market segment where your product is required.

2. High Operations Cost

Running a business requires an Operation cost which is your Employees Salaries, office spaces cost, Internet billing, Tea & Snacks, High Customer Acquisitions Cost, etc. When your Cash Outflows is high and inflows are low then running a startup becomes challenging. This led to a situation of deadlock and finally an Entreprenuer has to shut down his show,

3. No Understanding of MVP

MVP stands for Minimum Viable Product. Most of the Entrepreneurs are unaware of this term and even before getting a single customer on to their platform they start putting hefty amounts of money into the product development which led to the delay in the product launch and they miss the major opportunity of customer acquisition and lack of market understanding.

4. Lack of Investment Sources

Once the product starts acquiring customers and positive cash flows then Startup needs a rapid investment to scale their product to the masses. But sometimes lack of capital stops them to experiment with various markets. And a new competitor with high investments into the market can kill the dreams of an Entreprenuer.

5. Government Policies

Its not very often but yes Government policies play a major role in the future of a Startup. Like in our case, we had a Cryptocurrency Exchange and due to RBI regulations, we had to stop the Operations and finally we shut down the Company. This happened with lot of Startups in the past so my advise is to have a check on it before even launching a product

Though I have informed users about the failure in their first startup but actually its not always a case. You can be successful even in your first startup if you will have the understanding about how to a market fit product with right strategies. For more information, feel free to connect with us anytime on [email protected]