90% Of Startups Fail: Top 5 reasons for IT startup failure

We continue to talk about startups and their reasons for failure or success. Today we analyze the most common mistakes when launching IT startups! By the way, here is the link to the article where we wrote about startup reasons for success.

Some business coaches say that mistakes make it possible for companies and individuals to grow. Yes, that’s common sense, but don’t underestimate the mistakes. No one starts new business thinking, “Yeah, this one will just be my starter. I’ll get it right next time.” Nobody wants to fail, and yet the majority of startups do fail.


90% Of Startups Fail: Top 5 reasons for a startup failure


Oh, that disappointing statistics…


Surely you already know that 9 out of 10 startups will fail. This is a hard and bleak truth, but try to see a motivational moment in it. However, with starting your business you will face a serious challenge and this article could help you to be prepared for it.


Top 5 reasons for IT startup failure


Our goal is not to list them all for you, but rather to point out the most significant causes of failure.


1. The product is not needed by the market


This point about preparing before the launching a startup. Entrepreneurs very often forget or don’t know about it because overly believe in their idea. Marketing research can help you to save your money. If your product no need for the market or consumers don’t understand its features and benefits you can’t sell it! Move on the needs of your consumers. But first of all, you should determine who it is.

Do marketing research may consist of different tasks. Let us simplify it a little bit. We recommend that you first determine the following:

  1. Who is your target audience?
  2. What products in your niche are selling best?
  3. Will your products be just as popular?
  4. How much money is in your niche? Will your business have enough for 0.5-2% of this pie?

If the collected statistics inspire you, then you should make up the selling offer and start your sale.


2. Low quality of the product


If you have successfully done the test before launching your startup, and your products are in demand, then it is very important to control their quality. Any buyer wants to make a good deal and doesn’t want to get problems. If you will listen to your consumers and will improve your product every assembly you can make a big profit.


3. Not qualified team


A good product and the best idea are not a guarantee of a successful business. Your team can make-or-break your startup. Remember it! Gather in your team those who have the same passion for startup idea as you are. And those who can add to your team skills that you do not possess.


4. Insufficient funding and high costs


We saw a lot of startups in which founders created too many expenses in the early stages of business development. How? They hired staff, expanded product functionality, spent too much on marketing and etc. All this did not pay off… Over time, their business made large debts, which subsequently led to bankruptcy. To improve your business or products, you must either generate sufficient profit or attract investment.


5. Ignore Customers


Another mistake made by entrepreneurs is the creation of products that the founders and the team like. But what you like may be unnecessary for the consumers. Always when developing a product or upgrading it, rely on the opinion of your target audience.




If you want your startup to be among those 10 percent successful, do not repeat the mistakes mentioned in this article. Also, it’s very important to work hard and always analyze your successes and failures. This will allow you to move in the right direction.


Want more information about StartUp or business development? Follow this Link.

If you need to get IT consulting just write us on office@syntech.software.

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