Blog Post

Why tech startups are failing

Tech startups are companies that strive to solve various problems encountered by customers with the use of technology. Their primary purpose is to bring technology services and products to the market  with the idea of solving a problem that their customers have at this time. Startups are scalable businesses, so every tech startup is small in the beginning, but it has the potential to grow based on customer demand and the products they are offering.

How are most tech-startups organized?

Most tech startups are started by people that have a lot of tech knowledge. And you do need that in order to create some very high-quality products and services. Creating a tech startup is extremely important if you can only use the power of technology to make things work in a proper manner. The issue that most tech startups encounter is that their owners and even employees are not business guys. They know how to solve a problem, but they lack any business and management experience. Which most of the time is crucial for any startup’s growth.

Why tech startups with no business background fail

No business background can be a major problem, because there’s a lack of perspective, management and financial skills. Even if there’s a good know-how, if you lack the knowledge needed to promote your business then there will be problems. Some of the other reasons why tech startups fail include the lack of market need, they run out of cash, they don’t hire the right people or they get outcompeted.

Good tech startups need to be creative, they need to push past the boundaries and come up with some very professional ideas. Pricing/cost issues can also be a problem, not to mention poor marketing, the fact that you might ignore customers, the product is mistimed or you just don’t have a good business model.

The best setup

Now that you know why tech startups fail, it’s important to figure out what’s the best setup for such a startup. Ideally you want to have tech guys that focus on creating products/services but also business professionals that will take care of legal stuff, product marketing, deliveries, customer support and so on. Business management is crucial for any tech startup, especially if you just have a team consisting of a few people. There’s still potential to do wonders, but you have to know how to handle this type of problem and how to make the most out of it in the long run.

You will always see tech startups failing left and right due to the reasons listed above. The lack of a good mix of people is definitely a major downside and it can lead to problems. But at the end of the day your primary focus has to be on understanding your customers and their demands so you can create the best service/product for them. You will be very impressed with the results, and the payoff alone will be extraordinary every time. Make sure that you learn from mistakes and always strive to innovate, otherwise your tech startups is doomed to fail. However with the right ideas and a keen eye to feedback you can always do wonders in any industry!

Dario Evers

Dario Evers

Dario is a highly experienced operations manager, with strong focus on customer centricity and corporate innovation. He has a demonstrated history of working in the financial & consumer electronics industry.

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