Failure

Failure is inevitable when building something outstanding. Life will always be threatened by plenty of factors intending to end it and that’s why 99% of startups fail to exceed the third year. .

The same applies to build and running a startup as it does not only have life, it also has a tendency to achieve relevance and is immediately influenced by the same elements that threaten anything that lives.

99% of startups in Nigeria fail to exceed the third year because of certain factors that are discussed in this article.

The energy that startups display as soon as the starting whistle blows will almost make an onlooker to disagree that they are likely going to fail before the expanse of 3 years.

Failure is not something beautiful, but it has a certain beauty that can be fully studied and understood.

Startup failure has several factors that are very obvious. While some can be easily avoided with less experience, so many other factors need more than experience to avoid them.

As a deviation from a contemporary understanding of what a startup is, It is best to recognize that a startup is not a small version of a big company.

Scott Hoffman (Author of The Startup Owner’s Manual) describes a startup as a “Temporary organization, in search of a workable, scalable, achievable business model”

This clearly explains that indeed startups naturally have short lifespans. But the lifespan here refers to the gap between discovering a workable business model and becoming a functional company.

The following are the validated reasons why 99% of startups in Nigeria fail to exceed the third year.

  1. A Poor or Total Absence of Vision
  2. Insufficient knowledge of their market.
  3. Poor leadership
  4. Demotivated Team
  5. Lack of Sustainable Mentorship
  6. Lack of Funding
  7. Absence of strong partnerships
  8. Bad products
  9. Bad Business Model
  10. Wrong motives
  1. A Poor or Total Absence of Vision

It is true that big companies like Nike, Google, Tesla Motors, etc. are not big because of their huge revenues but they are big because of the huge vision.

The existence of the absence of a vision has been observed as a major contributor to the failure of 99% of startups, especially in Nigeria.

Insufficient knowledge of their market

Startups who do not have a good knowledge of their market end up selling to the wrong people. They advertise their products or services to an audience that does not need what they are selling. They try to sell Venus to the penguins of Madagascar. Spooky!

Poor Leadership

Poor leadership is a contributing factor to the rate of failed startups.

Right from the days of Leonidas of Sparta, to the reign of the Soldiers of great Napoleon, leadership has proven to be more important than all the arsenals of war put together.

Demotivated Team

Creativity and efficiency in work are birthed by consistent motivation which can be achieved in various ways.

Motivation has always been a tool used to demand (without asking) the very best from warriors, workers and any other group of people whose individual performance determines the success level of their work.

Startups, just like any other organization will thrive on motivation as it has the effect of high-performance drugs. But it is quite popular to find startups with no single structure kept in place to appreciate the high performance, excellent job delivery, honest commitment to the brand.

This usually leaves these startups demotivated, thus leading to poor performance in every sector of the business.

Lack of Sustainable Mentorship

Mentorship has always been the subtle way of avoiding personal mistakes as an individual and as a startup. There is an adage that says that “Experience is the best teacher” and it is best if the experience isn’t yours but rather an experience learned during the mentorship.

Startups kickstart without having a mentorship support system which can help them avoid mistakes, develop better business models, generate huge revenues and establish a presence in the lives of their users.

Lack of Funding

Startups need funding to start and to stay in operation. They need access to the required volume of funding to scale their business at the right time. 99% of startups in Nigeria do not have access to funding to start their business, and those that had funding to start do not have enough to allow them to run up to three years.

Absence of strong partnerships

The business partnership has proven to be one of the most profitable assets that every startup should have. It allows the business development process to follow through efficiently. It connects startups to opportunities designed to help them grow. 99% of startups fail to exceed the third year because of little or no business partners.

Bad products

There would be absolutely no competition if a startup kickstarts their operation with an excellent product bearing almost no semblance to a similar service provided by another startup.

Jeff Bezos of Amazon advised startups to avoid focusing on their competition, but they should focus on their users and by so doing will turn out alright.

Focusing on users here means getting feedbacks from them with regards to the Startup products or services. With the feedbacks, a startup will be able to consistently develop better products for its users.

99% of startups rather focus on the competition than listen to the feedback from customers thereby failing to provide them with the exact product that solves their problem.

  1. Bad Business Model

Startups generate revenue through their business models. A faulty business model will lead to failure in the startups operation. 99% of startups fail to reach their third year due to a faulty business model.

  1. Wrong motives

The main reason for launching a startup needs to be forged by passion rather than by a certain desire to be like others.

99% of Startups fail to exceed the third year because of the wrong motive for starting the business.

Some startup’s major motivation is to make money which is not wrong but will eventually seize to push them to the zenith of success when they fail to see a sizeable revenue after their first two years.

Finally, starting and running a startup is by far the most difficult journey ever. It is capable of successfully draining a team’s mental energy if the provision is not made for revitalization. But also, a successful startup gives the best form of happiness to both the team and the users.

Are you thinking of building an idea and joining the 1% of entrepreneurs that succeed in business?

Then head straight to Venture Capitalist For Africans and learn more about how to start and run a successful business.

Let’s keep building.

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