Why do startups really fail?
There are many websites and articles about this topic. Even many different opinions. From all the research we’ve done, most have three common main reasons, head and shoulders above the rest. These three reasons combined account for approximately 70 to 80% of failure rate.
The reasons are:
- Lack of Product-Market Fit
- Implementing wrong marketing strategies
- Run out of cash / lack of investment
If you resolve the first two reasons, chances are that your cash flow issues will resolve themselves, and if your runway is shorter than your breakeven, surely after resolving lack of Product-Market Fit together with strong sales, many investors will look differently at your startup’s performance.
f your startup has Product-Market Fit, and you know exactly which customers are your most valued customers (the ones who really loves your product), and even more, the reasons why they love it so much, you have all the tools you need, to engage a broader audience based on your real customers, not the ones who liked your Facebook page.
If you currently don’t have Product-Market Fit, don’t despair. There are tools and processes to rectify it. The quicker, the better. And worst-case scenario, it might be a good chance to pivot… but not to close down.
In other words, if you improve your Product-Market Fit, and improve your marketing strategy, it is inevitable that your cash flow or investable status will increase.
But The Thing Is… it all starts with Product-Market Fit.