Most of the entrepreneurs are passionate about their venture and the product they want to market. But  I have come across new start ups saying that they have a world class product, but these products would have some very minute difference in terms of delivery from the ones available in the market.

Getting excited about one's product is human psychology, but it has to generate the same excitement for the consumer who has to shift from his current brand to the new brand. A technological breakthrough by the an entrepreneur had reduced the time taken to manufacture the product from 7 hrs to 5 hrs. But that does not give the consumer any perceivable difference in terms of product deliveries.

Thus even if they market these products, it does not succeed because they are seen more as a me too in the market. The consumer is interested in sticking to a tried and tested brand instead of trying a new one.

Most of the startups fail because they fail to segment their market & identify the target markets. Target market/markets are very crsial because most of the sales comes from them. It is said that 33% of consumers contribute to 66% of your business.

Thus, new companies should identify their target markets properly & when they are able to do so, they win the game.

Necessarily in the order that is mentioned!!

Startups cannot be merely ideas and some funding. There has to be a vision in the idea. The idea needs to be fleshed in terms of viability, validity and cost sheets. It has to lead to a process in making the idea a physical reality. Market studies, consumer research and a very scientific approach to maketability of the idea have to be fertilised.

The flow of funds has to be decided and haveto be made available at each stage so that the process is smooth and the flow continuous. What I have tried to explain here may seem short and sweet but it requires a lot of patience and understanding. Like Ujval has mentioned PERSISTENCE and DOGGEDNESS!!

Thanks for the referral Veena :)

Why Start ups Fail

Reason 1: Market Problems

Reason 2: Business Model Failure

The Essence of a Business Model

The CAC / LTV “Rule”

The rule is extremely simple:

• CAC must be less than LTV

CAC = Cost of Acquiring a Customer
LTV = Lifetime Value of a Customer

The Capital Efficiency “Rule”

• Recover CAC in less than 12 months

Reason 3: Poor Management Team

Reason 4: Running out of Cash

What goes wrong

When to hit Accelerator Pedal

Reason 5: Product Problems

Lack of doggedness & persistence I think are key contributors to that.To my belief we are a country where people are selling even scraps & making money & hence there is a market for everything.

People may like the product/service you are introducing but then again they pay money for it & they want proper credentials for every thing which are created very gradually & its a very tedious process. One may come across a situation when people seem to be very interested with the product & might look like they will be the first to buy it, but when its money time, they might have a reason or other not to do so.

Investments & initial capital could also be a major reason. Many successful entrepreneurs suggest to be prepared for 3 times the capital needed initially & for 1/3rd of the sales that was expected.

Therefore many of them suggests to go for a humble start; remain, sustain, get recognized in the market as a player & then gradually spread your wings as per the market potential & when its the right time.

Why it won't go when you have passion & persistence!

Get the STP (Segmentation, Targetting and Positioning) right by meeting parameters of Affordability, Availability, Awareness, Accessibility and Acceptibility form customers point of view. Start ups fail if there are any shortcoming in the above mentioned parameters.

Ofcourse, Start-ups lacks funds and hence a sustainance plan has to be put in place till the time the enterprise gets sufficient earnings to sustain. Hence perserverance and endurance is also needed to run a start-up.

Government has identified this barrier for start-ups and is supporting entrepreneurs in this regard through incubation centres like STEP for IT. 

So if there is proper product idea and product differentiation, with the help of such Incubation centres , the number of failures in start-ups can be brought down.

a business man needs to possess not only money and knowlegde about the product but also extraordinary traits like adopting to worse situations, thinking differently from an ordinary person and capability of fighting back to make the failing project to success. he should be like another God.

STARTUPS SHOUD IDENTIFY THOSE WHO NEED THE PRODUCT OR SERVICE AND APPROACH THEM; YOU DO NOT SELL FACIAL CREAM TO 80+.  BUT ABILITY TO SELL FACIAL CREAM TO AN 80+ IS MARKETING AT ITS ZENITH!

if you want to be great perform in the market first you need your self analysis on your working capacity and your passions, no matter you will fail. next time you know what you can do and what you need to do.

When you start a new business, your understanding of customer needs as a business owner is very little. As a results it is hard to give a marketing message that sticks. So I agree with the hypothesis that marketing or lack thereof is one of the reasons for failure. 

 Although, I think that lack of sustenance plans is an even bigger problem that causes failures.

 I am saying this from my personal experience. I started my business last year and I am still trying to figure out what message to give to the customer to close a deal.

start-ups typically are short on specific market experience related to their offering - and sometimes they are also short on the ability to experiment logically to reach out to their target consumers.  yes, finding your target consumers is important and relatively the easier part, understanding your target consumer's behavior is MOST important and the MORE difficult part.  This is where a number of start-ups fail.

Both of these, the right innovation and the marketing mix, can gaurantee the success of the start-up.

Its just not about how gud the product is... the product has to fill a GAP.... a solution to a problem that really matters... for example... it wudnt really matter if u develop an automatic toothbrush, people dont need it. And even if you do... then u have to launch it in the right market, target the right people.

Marketing mix... very important... that automatic toothbrush (even thou a poor eg).. can be turned into a wonder product... if it is marketed correctly... maybe a few colors here and there... and fancy shape... and an advt that would make the small kids (lazy of brushin) go crazy.... 

The right distribution chain... and the right pricing could also play an important role. You shouldn't really luk into crossing the break even within 2 yrs or so... esp in a competitive market .. but if the product is unique... go straight head... and reach out!!!.....

While creating an initial Position in the Market, and to create the bare minimum Pull required for success of venture, marketers often make a mistake of allocating insufficient initial promotional budgets. More dependence is on Push which often creates the position of more supply than demand. This often results in premature death of a number of new Brands

In most  start ups the promotors  focus on 3 Ps i.e. product, price, place more than the 4th P Promotion. The general belief is If I have a good product, I price it right and my distribution network is in place my product will sell and will be profitable, the 4th P promotion most of the times takes a back seat. Start ups most often are working on a modest budget and the general belief is that marketing is a cost centre, the investment on marketing is a long term investment, the  returns  on which cannot be tangibily measured. Start ups most often believe in breaking even first, and after the bottom line graph starts moving north then invest a little on marketing, this lack of management focus on marketing  is the key reason why start ups fail at marketing.

like 5 panch boota's these are the five main element of sucessful venture in right proportions. any im balance may cause failure.marketing is only one the tool of the vacum in the market at right time and place.

it also depends largely on the product whether it need marketing or not,many times smaller the product size larger the marketing.

An idea can turn into a viable product with persistent and continuous improvement but there lies the catch.Start-ups become so obsessed with the fine technicalities of the product that they forget another important aspect i.e. marketing.In fact there have been instances when marketing has carried on products which were not worth the hype e.g. Windows Vista OS.Moreover it is always advisable to create the need and then administer the product.

A major reason why companies fail, is that they run into the problem of their being little or no market for the product that they have built. Here are some common symptoms:

Reason 1: Market Problems

Reason 2: Business Model Failure

Reason 3: Poor Management Team

Reason 4: Running out of Cash

Reason 5: Product Problems

Any startup starts with an Idea. When the entrepreneur is very clear about his Idea, next import step is to clearly understand whom you will be selling the product or rather who will be buying your product. Gathering demographic details such as income of the target customer, priorities of the customer etc. will help a lot in determining the price. Average customer will look always look for value for money. If you can make him feel that your product or service can give him that (value), then he will buy it. If (nature of business allows) possible its always better to try launch business in phases. After all no strategy (plan) can match the real experience. I will be launching my own startup in Dec-2010. So will let you guys know about my experience

If we talk to entrepreneurs, what many of them do is that they talk only about their product and their solutions.

They miss out the most important thing " How their customer is to gain from their solution/product" and " How they can add value to their customers".

What we have observed is that they create differentiation on wrong parameters like

• features
• pricing/cost

If starts up move with a vision to understand their customers and customers' customer. they would never fail