5 Reasons Why Most Start-ups Fail, But How the Few Survive

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It’s a fact that most new businesses will fail. More to the point, an estimated 90% of start-ups will be unsuccessful. This statistic may shock you, but don’t let it discourage you from trying to launch your business. Finding success might not be easy, but it’s also not impossible.

If you want your business to be part of the 10% that survives, start by avoiding these 5 start-up pitfalls:

1. Fear of failure

You shouldn’t start any business thinking that you’re going to fail. But if you should fail, you can’t give up. Learn from mistakes and move on. Only by continuing to push ahead will you eventually succeed.

This is where Walt Disney’s story is inspirational. The first distribution company Walt Disney ever signed an agreement with, dumped him at the last moment, but he didn’t give up. He kept working hard, eventually establishing one of the best animation companies in the world and began the huge global empire which is Disney.

2. Overuse of Ads

A good website is essential to small business success and while certain online features are often missed, one of the most neglected is optimal content. This doesn’t only include not providing users with the information they’re seeking upfront, but also overloading your site with ads. Ad overload will turn users off your brand.

Facebook is a company that hasn’t relied on advertising to spread its message. According to Facebook CEO and President Mark Zuckerberg, just slightly less than 10% of the pages are ads and the company is growing at the rate it wants to.

Ads are to be expected, it’s not just Facebook but also Instagram, Snapchat and Twitter that are using ads on a more increased basis. Users will be looking for the right balance and companies responsible for placing the ads will be looking for that fine balance between opportunity and being careful not to flood social media with advertisements.

3. Fear of making changes

Don’t be afraid to make changes, even if they’re drastic. You don’t always need to follow what works for the competition in your industry. If you want people to take notice, don’t do what everyone else is doing. Stand out from the crowd.

This is exactly how PlayOJO changed the game in the iGaming industry, by dumping traditional deposit bonuses and wagering requirements. The casino also offers players real money back on every bet, win or lose.

Zappos, now owned by retail giant Amazon, totally changed the shoe game when they launched back in the 90s. Founder Nick Swinmurn was left frustrated when on a shopping trip looking for a pair of trainers, so much so that this inspired him to launch the online store. He built core values into both the business and it’s employees. It is now a market leader in that space, and rightly so. For Nick and Zappos, doing something differently paid off massively.

4. Not thinking like a consumer

You can’t appeal to consumers if you don’t understand them. Remember, you’re a consumer, too. Ask yourself: What makes your product unique? What problems does it solve? How does it help you? Would you buy it?

Asking the question: “Why isn’t there a one-stop shop for food delivery?” was what got GrubHub started by Chicago software developers Matt Maloney and Mike Evans. The pair grew frustrated calling restaurants in search of takeaway food for dinner, and created the solution they were looking for. It became a huge success and is now valued at over US$3 billion.

It is absolutely essential that you think like a consumer, act out the service/product process that they would go through and highlight the pros and cons. This is exactly what PlayOJO and Zappos did in the above examples, and that has shaped both company core values and the message they are putting out to consumers and competitors in their markets.

5. Taking on more than you can handle

You need to know your limits, mentally, physically and financially. Too many entrepreneurs try to grow their business too fast without a concrete plan of action. You need to understand where you’re going, have an idea how to get there, and know how much it will cost. Some businesses will take some time to get it right, but that’s what a steady and solid platform looks like. You wouldn’t want to build a house in a day right?!

Look at Voxy. This mobile app helps Spanish speakers learn English through short daily lessons that are based on real-life experiences. Instead of expanding to other languages, Voxy chose to focus on teaching English primarily to Spanish speakers. This cemented its presence in the market and it now has over 3 million users.

Finally, don’t forget that start-up success also requires a lot of luck. Sometimes it’s just a case of right place, right time!


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Rick Tinson is a freelance writer with a keen interest for business, travel and gaming sectors. If it’s a mix of all 3 interests then it’s dreamland for this up and coming writer.

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