Why Do startups fail? Find Success

11 Jan 2018

Starting Your Own Recruitment Agency

You’ve heard the stats, the stats that tell you that ‘75% of venture-backed startups fail’ (Entrepreneur.com), so why would you think that you’re going to succeed? If you’re an entrepreneur or you have already begun your startup, you’ll know the answer, yours will not be one of the 75%, your determination and drive is strong, and you have no reason to expect to fail.

We have had over 15 years experience of working with startup recruitment firms, and we love working with them. So, still channelling the spirit of the New Year, we’re bringing you some of the most likely points of failure for startups, for you to take and turn into positives in your own startup, we’re helping you avoid the pitfalls.

Finding that Gap in the Market

Is there a need in the market for your product? Do your research, look at possible competitors and what product or service they are offering, how does yours differ?

This may well be the way that your startup was born, you identified a gap in the market and as long as you are clear on what that need is then you’re on your way to avoiding this pitfall.

We would also advise that you stay acutely aware of any changes or new entries in your market that could threaten the individuality of your startup.

An infographic reported by Forbes last year showed that 42% of failures were classed as having ‘no market need’.

Take advice

Embarking on the startup journey can be a long journey, during which you may gain business partners, investors, managers, all of whom may have ideas and suggestions to bring to the startup plans.

The project is yours, grown from nothing, however, outside thoughts ideas and input can take you to the next level, help you make the right choices and prevent you from making regrettable decisions. Having the insight to be able to accept these, could be a step towards your startup surviving.

Keep the Passion

The founders and business owners are the driving force behind the startup, and hold the passion for the success of the startup. It’s important that this does not begin to fade as the startup ages. If there is little movement or growth for X amount of months, this can be extremely frustrating and disheartening, but the focus must remain and the passion to succeed must continue.


Forbes listed this as the second most common reason that startups fail, with 29% failing due to ‘running out of cash’. Startups burn through cash at an alarming rate, but why? And how can you avoid doing the very same? You need to start bringing gaining consumers, you need to gain users, gain traction, but not specifically to start making money, you need to have this traction to acquire the right investors and the right mentors, who will advise you on the spending of their investment.

Don’t try to grow prematurely, it’s exciting when the investment comes, however these funds need to be spent wisely, so hiring all of the staff you can think of or investing in a bigger premises, may not be the right way to go. Grow your startup steadily and stay frugal where you can.


Being able to grow your team is a great, you get to grow your startup from a small handful of individuals, or perhaps even just you.

Ideally you will have a plan in place already, when you have the funds and need, who will come first, perhaps marketing or maybe accounts. Hiring as few bodies as possible to begin with will ensure you’re not spending unnecessary money. Where possible you could benefit from using freelancers who are able to carry out work on an ad hoc basis, not commiting your startup to high monthly costs.

Flexibility and the Ability to Move with the Tide

You know your market and you know how your startup is going to fit in to or disrupt that market. However we are surrounded by companies that have taken note of how the market reacted to their products or services, and made necessary changes to survive and succeed. Apple for example, began producing personal computers, moved in to producing music software and are now on of the leading manufacturers for smartphones.

Making changes to your plans is a large part of surviving as a startup and ultimately avoiding failure, so be flexible.

Try New Millennia today!

Call us on 0161 337 9882 to get started

Get In Touch