Reasons Business Startups Fail
TOP 20 REASONS STARTUPS FAIL
Written by Gregory L. Phillips, Founding Partner
"Many startups can avoid a lot of the reasons listed just by having the right legal advice and thus avoid another top reason startups fail: legal challenges."
--- GREGORY L. PHILLIPS, HOUSTON BUSINESS ATTORNEY
At Phillips Kaiser we consult business owners who face many if not all of the issues on this list, whether it's legal challenges, disharmony among investors or partners, pivot went bad or just the failure to pivot. These are common recurring themes amongst startups that can be avoided.
According to smallbiztrends.com, 50% of small businesses fail in the first four years.
It's a fact most startups will fail.
The Lean Startup Methodology
Applying the Lean Startup methodology can significantly reduce the chances of failure. And yes, Facebook, Google, Instagram, Airbnb, Snap, YouTube, Dropbox, MailChimp, and TechCrunch, all used the Lean Startup methodology.
The Lean Startup methodology means getting a product or service to the market fast while being capital efficient. This reduces the chances of failure from the second top reason startups fail: ran out of cash.
Once your product or service is available in the marketplace, it is iterated repeatedly. Demand is continuously tested, and the market determines if the iteration is wanted or not. Thus, mitigating the chances for failure of the top reason listed on the chart above: no market needed.
Shortening product development cycles and measuring actual progress without resorting to vanity metrics can help in learning what customers really want. This alone can reduce many of the top reasons startups fail, such as mistiming the product, not understanding the customer, pivot gone bad, and loss of focus.
Many startups can avoid a lot of the reasons listed just by having the right legal advice and thus avoid another top reason startups fail: legal challenges. Legal representation does not have to cost an arm and a leg. Today, startups and small businesses can utilize General Counsel Services which can reduce legal fees for startups and small to mid-market size companies by 60 percent or more!
Retaining legal counsel is essential for the long-term success of every startup and new business. Unfortunately obtaining legal counsel from conventional leveraged firms is expensive. General Counsel Services by Phillips Kaiser offers a new way for companies to get legal help, protection, and advice without breaking the bank or burdening their bottom line.