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White Hutchinson Leisure & Learning Group, Kansas City, MO, USA

The most common reasons startups fail

Some startups succeed, yet so many fail, and it's failure that teaches us the best lessons. What are the main reasons why startups fail?

In a survey carried out by tech blog ArcticStartup and CoFounder magazine, more than 100 startup entrepreneurs shared their experiences and lessons learned. Although the survey was directed at tech companies, there are lessons that LBE and FEC entrepreneurs can learn from the results. Here are four of the top findings from the survey:

1. The team doesn't have what it takes to succeed
   
   A startup's biggest challenge is getting the team right according to 37% of the founders surveyed. Having enough diversity for a variety of skills that are needed to succeed from day one is essential. No less important is trusting your team and giving them control over their responsibility areas.
2. The idea is not serving the market need
   
   Sometimes the market simply isn't there yet. Of the surveyed entrepreneurs, 20% said their startup failed most likely because of the product market fit. The biggest mistakes startups make are... not understanding the target market, which might result in focusing on multiple ideas rather than one main idea.
3. Running out of cash too fast
   
   Cash isn't everything when it comes to starting a business, but when you run out of it, there's not much that can help according to 13% of the surveyed startup founders... Many businesses that fail aren't insolvent or even unprofitable, they just run out of cash.
4. Not realizing the competition in the market
   
   How often have we heard, focus on your own thing instead of getting distracted by the competition? This does not mean, though, that you should ignore the competition. Where startups go wrong is believing they are the only ones with the great idea and going out there without proper competitor research. Ignoring the competition is a recipe for disaster in 19% of startup failures.

You can read the full report on the survey findings by clicking here (www.fastcompany.com/ 3044519/ hit-the-ground-running/ 7-of-the-most-common-reasons-startups-fail) .

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