Why starups fail?

Planning, Designing, Marketing, Execution, Finance, Investment and Advertising are the important factors for every project/ product o establish and achieve success in long run. This is regardless of the cost of the project may it be Nirma washing powder or Dhirubhai Ambani's entrepreneurship.

The Planner can never achieve and perform all the above key roles. He has be associated and have a fully dedicated team with him to introduce the first piece of the product in the market. The behind the screen team is always under the observation of the project head/ CEO as he expects 100% from this staff/ supports. But, the Marketing, Execution, Finance, Investment and Advertising personnel are always worried about their personal benefits and individual image. Even if the CEO has declared equal share of profit among these guys, still they have wave of doubt floating into their mind and keep planning to have additional benefits regardless of their responsibility to the minimize the basic cost of the product to the consumer. Here I do not know why a VP (Mktg) opts for a Honda City when he cover the similar travels by a hired car or low segment salon car. During establishing process of the product the distance journeys can be performed by expensive train class in lieu of by air thus reducing the cost to the consumer with a comparatively high quality product to the consumer. I think it should be an ideal way of establishing any product rather than high cost product with highest quality.

If the key persons cut down their individual costs and forget about initial 'additional' benefits, the startups would never fail. Not only avoiding failures but the product would establish with its deep roots, as well.

Marketing, Execution, Finance, Investment and Advertising personnel please do not take this as personal but be sincere to your organisation and stick to that. You can negotiate for your packages and 'Additional' benefits.

Most business plans in start up are worked to get the financing and seldom reflect the reality of the market space the product hopes to compete in.

Unfortunately the reality is far less than the business model presented.....and things go down hill.

Any start up is a venture into unknown territory. However good one's business model is, putting together an effective management team is not easy task and many a unforeseen factors can drain the financial resources ( nothing is unlimited) and support with additional finance from the investors for a new start up is rarely seen.

Investor public do jump with investment once you put up good figures on P/L account but it takes 3 to 5 years for a start up to come any where near understanding the behavior of all stake holders and arrive at a right equation between them.

Now a days, there is a lot of help from Institutional financing companies but if plans go awry, they will not risk additional finance. It is almost like each situation is different but there are commonalities. 

One welcome sign  now a days, is Institutions are taking a lot more interest in making the units they finance to be successful. I have seen my self how Venture- East, a venture capital firm is working closely with the entrepreneurs to understand their situation and extend additional help when there is financial crunch which normally kills the Start ups.

Some founders see the proof of concept as some holy grail to which they have to get to in order for all their dreams to come true. The proof of concept (POC) is fully part of startup theory, and no one is typically looked down upon for building one. In the greater scheme of things, it is good to embark on building a POC.

Problems do arise in cases where the founders don't have too much of a plan beyond the POC and have just enough money in the bank to work on the startup a few months after the POC release, or are hoping that the POC will bring enough money to pay rent either by bringing investment, or customer revenue from sales of the product.

It goes without saying that nowadays very few products/services offered newly are not backed by better concept, planning, design, price, packaging and financial support to make it a huge success. But mainly the startups face able and committed manpower crunch and in the midway such ventures nosedive.... I feel this factor has more weightage than any other reasons of failures... Everywhere there is a dearth of proper person who takes a rational decision at every level of management... Reasons may be many but truth remains the same.... I hope everyone here will agree the reality...

Crisp execution—rather than a clever idea— is vital to the success of new businesses. It stands to reason, therefore, that poor execution is the downfall of most startups that go bust.

First, you should conduct an honest evaluation of your skills and only pursue opportunities that are aligned with your strengths.

It's also wise to surround yourself with talented people who aren't afraid to speak up when you're headed off a cliff.

As a founder, you need the discipline to know when to hand over the reigns to a professional manager who can take your business to the next level.

It's best to keep most costs variable at first and use equity capital to finance your startup until your company has been around a while and you develop some confidence in your ability to forecast sales. Delay making investments or taking on fixed obligations until you have a critical mass of customers. You'll know when it's time to rent a larger office space or hire that second shift when you've got a backlog of ordres on the books.

Revenues projections for early-stage companies can be all over the map, which means that new ventures have even less margin for error than larger competitors. In this environment, it can be dangerous to take on more than a modest amount of debt or other fixed obligations (rent, salaries, etc.). If revenues take longer to ramp up than expected—as they nearly always do—you may find yourself handing the keys of your business over to your creditors.