Starting a startup is an exciting and challenging journey. However, the reality is that most startups fail. @ Cédric Walter | Friday, Jan 5, 2024 | 13 minutes read | 2618 Words | Update at Friday, Jan 26, 2024

Starting a startup is an exciting and challenging journey. However, the reality is that most startups fail. According to a report by Harvard Business, approximately 90% of startups fail within the first year (Why Start-ups Fail - Harvard Business Review. . By understanding the common reasons for startup failure and following the tips outlined above, you can navigate the challenges of entrepreneurship and build a successful business. Good luck!

The reasons for startup failure can be many

Some of the most common ones are:

Lack of market demand

Many startups fail because they offer a product or service for which there’s no substantial market need. They build a product based on an idea they think is great, but they don’t validate this assumption with solid market research. On the other hand, some entrepreneurs may overestimate the market size, leading to unrealistic projections and subsequent disappointment when these figures aren’t met. Both scenarios can lead to premature business demise.

Lack of funding or financial mismanagement

Starting a business requires capital. Many startups fail because they run out of cash or have poor financial management. It’s essential to have a solid financial plan and to keep track of your expenses and revenue.

Bad team dynamics

A startup’s success depends on the team’s ability to work together effectively. If there’s disharmony among the team or investors, it can lead to the company’s downfall. It’s essential to have a team that shares the same vision and values and is committed to the company’s success.

Poor execution

Even if you have a great idea, it’s essential to execute it well. Many startups fail because they don’t have a clear plan or don’t execute it effectively. It’s essential to have a solid business plan, set realistic goals, and track your progress.

To avoid these pitfalls, here are some tips for startups

Understand your market

Conduct thorough market research to understand your target audience, their needs, and their pain points. Validate your assumptions with real-world data.

  1. Identify your target audience: Determine who your ideal customers are by considering factors such as age, location, income, interests, and preferences. This will help you tailor your products or services to meet their specific needs and expectations.
  2. Analyze industry trends: Research the latest developments in your market sector to identify emerging opportunities, threats, and shifts in consumer behavior. This will help you stay ahead of competitors and adapt your strategies accordingly.
  3. Study your competition: Investigate other businesses that offer similar products or services as yours and analyze their strengths, weaknesses, pricing, marketing efforts, and customer feedback. This will give you insights into how to differentiate yourself and gain a competitive advantage.
  4. Evaluate customer pain points: Identify the problems or challenges your target audience faces that are not being addressed by existing solutions. This will help you create innovative products or services that provide value and solve their issues more effectively than alternatives.
  5. Assess market gaps: Look for areas where there is a lack of suitable offerings for your target audience, which could be an opportunity to introduce new products or services that cater to those needs. This will help you capture untapped markets and grow your customer base.
  6. Define your unique selling proposition (USP): Determine what sets your startup apart from competitors and how you can communicate this value effectively to your target audience. Your USP should highlight the benefits of choosing your products or services over alternatives, such as better quality, lower price, or more personalized experience.
  7. Establish market segmentation: Divide your target audience into smaller groups based on shared characteristics and preferences. This will help you tailor your marketing efforts and product offerings to each segment’s specific needs, increasing the likelihood of success with each group.
  8. Develop customer personas: Create detailed profiles of your ideal customers, including their demographics, psychographics, behaviors, goals, challenges, and preferences. This will help you better understand their motivations and tailor your marketing strategies to resonate with them more effectively.

Have a solid financial plan

Create a detailed financial plan that includes your expenses, revenue, and cash flow projections. Keep track of your finances and adjust your plan as needed.

  1. Define your startup’s objectives: Clearly outline the goals you want to achieve with your business and how they will contribute to its success. This will help guide your financial planning process and ensure it aligns with your overall vision.
  2. Conduct market research: Understand your target audience, industry trends, and competitive landscape to inform your pricing strategy, revenue projections, and cost structure. This will help you create realistic financial forecasts based on accurate data.
  3. Develop a detailed budget: Create a comprehensive budget that outlines your startup’s projected income, expenses, and cash flow for the next 12 months or more. Include items such as staff salaries, rent, marketing costs, inventory, and other operational expenses.
  4. Set realistic revenue projections: Estimate how much money your startup will generate from sales of products or services based on historical data, industry benchmarks, and market research. Be conservative in your estimates to account for potential challenges or uncertainties.
  5. Plan for growth: Allocate funds for expansion, hiring new staff, investing in marketing, or other initiatives that will help you scale your business and achieve your objectives. This will ensure you have the resources needed to support growth and capitalize on opportunities as they arise.
  6. Monitor and adjust your financial plan: Regularly review your startup’s actual performance against its budget and financial projections, identify any discrepancies or issues, and make necessary changes to your plan to stay on track. This will help you adapt to changing circumstances and maintain control over your finances.
  7. Seek external funding if needed: If your startup requires additional capital beyond its initial resources or cash flow projections, consider seeking investment from angel investors, venture capitalists, or other sources. Be prepared to present a compelling pitch that outlines your business plan, financial forecasts, and growth potential.
  8. Implement proper accounting practices: Establish a robust bookkeeping system to track your startup’s income, expenses, and cash flow accurately. This will help you stay organized, maintain accurate financial records, and make informed decisions based on reliable data.
  9. Create a contingency plan: Identify potential risks or challenges that could impact your startup’s finances, such as market fluctuations, economic downturns, or unforeseen expenses, and develop strategies to mitigate their effects. This will help you prepare for the unexpected and protect your business from financial strain.
  10. Consult with professionals: Seek advice from experienced accountants, lawyers, or financial advisors who can provide guidance on tax planning, legal matters, and other aspects of managing your startup’s finances effectively.

Build a strong team

Hire people who share your vision and values and are committed to the company’s success. Encourage open communication and collaboration.

  1. Define roles and responsibilities: Clearly outline the roles, responsibilities, and expectations of each team member to ensure everyone understands their contributions to the company’s success. This will help avoid confusion and misunderstandings within your startup.
  2. Hire for attitude and potential: Look beyond candidates’ resumes and focus on their attitudes, work ethic, and growth potential. A positive mindset and willingness to learn can be more valuable than years of experience in a startup environment.
  3. Establish a strong company culture: Create a unique and inspiring company culture that reflects your startup’s values, mission, and goals. This will help attract like-minded individuals who share your vision and are motivated to contribute to the business’s success.
  4. Provide opportunities for growth: Encourage team members to learn new skills, take on additional responsibilities, and advance within the company. Offering growth opportunities can boost morale, increase job satisfaction, and help retain top talent in your startup.
  5. Foster collaboration and communication: Promote open dialogue among team members and encourage them to collaborate and share ideas. This will help create a supportive environment where everyone feels heard and valued, leading to increased innovation and productivity.
  6. Set clear goals and expectations: Establish measurable objectives for your team and ensure each member understands their role in achieving those goals. Regularly review progress and provide feedback to help them stay on track and motivated.
  7. Celebrate achievements and milestones: Recognize and reward the hard work and accomplishments of your team members, both individually and as a group. This will boost morale, reinforce positive behaviors, and foster a sense of pride in your startup’s successes.
  8. Address conflicts and challenges promptly: Deal with any disagreements or issues within the team quickly and fairly to prevent them from escalating and negatively impacting productivity or morale. Open communication and transparency can help resolve most problems effectively.
  9. Lead by example: As a startup founder, demonstrate strong leadership qualities such as integrity, dedication, and adaptability. Your actions will set the tone for your team’s behavior and influence their attitudes towards work and collaboration.
  10. Continuously evaluate and improve: Regularly assess your team’s performance and identify areas where you can enhance their skills or processes.

Execute effectively

Have a clear plan and set realistic goals. Track your progress and adjust your plan as needed.

  1. Define clear goals: Establish specific, measurable, achievable, relevant, and time-bound (SMART) objectives for your startup. This will help you stay focused and motivated as you work towards success.
  2. Develop a strategic plan: Outline the steps needed to achieve your goals, including marketing strategies, product development plans, financial projections, and growth targets. This roadmap will guide your decision-making process and keep your startup on track.
  3. Assemble a strong team: Hire talented individuals who share your vision and complement each other’s skills. A diverse and dedicated team is crucial for executing your strategic plan effectively.
  4. Establish processes and systems: Implement efficient workflows, communication channels, and data management practices to ensure smooth operations within your startup. This will help you maintain control over various aspects of your business and make better-informed decisions.
  5. Prioritize tasks and delegate responsibilities: Identify the most critical tasks that contribute to achieving your goals and focus on them first. Delegate or outsource other tasks to free up time for more important priorities.
  6. Monitor progress and adjust as needed: Regularly review your startup’s performance against its objectives, identify areas of improvement, and make necessary changes to your strategic plan or processes. This will help you stay agile and adaptive in the face of challenges or changing market conditions.
  7. Communicate effectively with stakeholders: Keep your team, investors, customers, and other relevant parties informed about your startup’s progress, achievements, and setbacks. Open communication can help build trust, maintain morale, and foster collaboration among all involved in the business.
  8. Focus on customer needs: Understand your target audience’s preferences, pain points, and expectations to tailor your products or services accordingly. Delivering value to your customers will drive growth and success for your startup.
  9. Manage resources wisely: Allocate funding, time, and personnel efficiently across various projects and initiatives within your startup. This will help you maximize the impact of your limited resources and minimize waste or inefficiencies.
  10. Stay informed about industry trends: Keep up-to-date with developments in your market sector to identify new opportunities, stay ahead of competitors, and adapt your strategies as needed.

Embrace failure

Failure is a part of the startup journey. Learn from your mistakes and use them to improve your business.

  1. Cultivate a growth mindset: Understand that failures are opportunities for learning and growth. Embrace challenges and view them as stepping stones towards success.
  2. Establish a culture of feedback: Encourage open communication within your team, where everyone feels comfortable sharing their thoughts, ideas, and concerns without fear of judgment or retribution.
  3. Foster experimentation: Promote a culture of testing and learning from failures by encouraging your team to try new things, take calculated risks, and learn from the outcomes.
  4. Develop resilience: Teach yourself and your team how to bounce back from setbacks and maintain a positive attitude even in difficult situations.
  5. Learn from others: Seek advice and insights from successful entrepreneurs who have experienced failures, read books or articles about failure and success, and attend workshops or conferences that focus on these topics.
  6. Celebrate small wins: Acknowledge and celebrate the progress your startup makes, no matter how small it may seem. This will help maintain morale and motivation throughout the ups and downs of entrepreneurship.
  7. Set realistic expectations: Understand that failure is a natural part of starting a business and be prepared for setbacks along the way. Manage your team’s expectations by setting achievable goals and celebrating progress towards them.
  8. Reflect on failures: Regularly review your startup’s failures to identify patterns, learn from mistakes, and make necessary adjustments to improve performance and avoid repeating the same errors.
  9. Build a support network: Surround yourself with mentors, advisers, investors, and other entrepreneurs who can offer guidance, resources, and encouragement during challenging times.
  10. Stay flexible: Be prepared to adapt your business model or strategy as needed in response to failures or changing market conditions. This flexibility will help you stay agile and responsive to the needs of your customers and industry.

“You Screwed Up!” by Alice Hlidkova

You Screwed Up! by Alice Hlidkova

The book “You Screwed Up!” by Alice Hlidkova is a self-help book that offers valuable insights into the lessons learned from failure in entrepreneurship. The author compiles interviews with entrepreneurs who share their story in anonymity, giving them a safe space to reflect on their mistakes and successes.

One of the key themes of the book is how running a startup can be stressful, and with big pain points to be learned. Despite this, what motivates so many entrepreneurs to take that risk? The author explores this question by delving into the motivations behind entrepreneurship, including the desire for freedom, autonomy, and the pursuit of success.

Another important aspect of the book is the lessons learned from failure. While it can be difficult to admit when you’ve made a mistake, the entrepreneurs interviewed in “You Screwed Up!” share their stories and offer valuable insights into what went wrong and how they could have done things differently. The author identifies common patterns that emerged from these interviews, such as delivering incomplete or lucid contracts, making risky investments, ignoring due diligence, and trusting the wrong investors.

One of the strengths of the book is its focus on entrepreneurship specifically. While many self-help books offer general advice, “You Screwed Up!” is tailored to those who are starting a business or looking to take their company to the next level. The author provides practical tips and strategies for entrepreneurs at all stages of their journey, from idea generation to scaling up.

Overall, “You Screwed Up!” by Alice Hlidkova is an inspiring and informative book that offers valuable insights into entrepreneurship and the lessons learned from failure. Whether you’re just starting out or looking to take your business to the next level, this book is sure to be helpful in guiding you towards success.

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Cédric Walter is a French-Swiss entrepreneur, investor, and software engineer based in Zurich, Switzerland. He spent his career developing software applications for Swiss insurance companies to handle billions of dollars in premiums. He cofounded Innoveo AG and as the software architect developed the no-code platform designed to reduce the manual coding that powers many software apps. As an active participant in the European hacking community, he works on many open source projects including blockchain. Cédric is a winner of multiple hackathons. His expertise include designing back end, event-based, and blockchain systems. Cédric is also the founded Disruptr GmbH, a software development company that offers full spectrum of services for businesses of all sizes.

JAVA full-stack developer since 2000, in Blockchain since 2017, Certified Scrum Master 2012, Corda Certified Developer in 2019, Ethereum smart contract expert in the SWISS Blockchain Security working group


  • HackZurich 2022 – Level Up in top 25 finalist among 134 submissions
  • SBHACK21 – SwiFi winner of best Solution on Algorand, overall Winner 3rd Prize, CV Labs Fast Track Ticket
  • HackZurich 2020 Europe’s Biggest Hackathon winner in category Migros
  • SBHACK19 – LendIt winner of Swiss biggest Blockchain Hackathon. On chain insurance and ledger for agricultural land soil.
  • Member of the Bitcoin Association Switzerland and Cryptovalley association Switzerland,

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