How to analyze why a startup has failed?

Startups could fail for a variety of reasons. I’ve tried to list a few that come to my mind:
  • The Concept was not relevant for the intended target audience i.e. was your targeting wrong? Could the concept have been more meaningful for a different set of customers (e.g. in a different geography, in a different age group, in a different income group, etc.)
  • The Product or service was not good enough or as promised i.e. was there an issue with the quality of the product or service? If customers were signing up but not retained, it indicates that the concept was relevant but the experience with the product or service was not good enough
  • The business model was not right e.g. for a services business could you have done a pay-per-use or pay-per-month basis instead of a one-time license fee?
  • Pricing was not right
  • Implementation was not right
  • Processes were not in place for the startup to scale up
  • The startup was resource starved – e.g. not enough budgets to market, not enough people resources to implement, etc.
  • Was the communication not good enough? Was the media plan not good enough? i.e. was the messaging through your brand communication material relevant, meaningful and compelling for your audience? Was the brand personality in line with what your customers expected?
  • Was the media planning not good or inappropriate? i.e. Media planning has two key components – reach and frequency. Reach is about how many people within your target audience you reach. Frequency is about how many times you reach those folks. E.g. for Rs.10 per CPC, with a budget of Rs.10,000, you could reach a 1000 people once, or you could reach a 100 people 10 times. Some concepts need reinforcing of the message, and hence higher frequency before customers convert. Analyze if your planning of media reach and frequency was right

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Analyze your experience on each of these points, or any other that you may think of, and evaluate what could have been done differently.

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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