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No! Lack of funding is not a major reason alone for failure. There are other important reasons why tech startup fails 1. Lack of Market research 2. Lack of Product research 3. Unscalable or Buggy Code All above reason accounts for failure of a startup. If you are not doing enough research on market or customer's requirement with the problem they are facing and start building product, it's going to be traumatic response. At modern age, with so much of option, people are very clear on their choice and easily choose brand that is widely available and not the new. Sometimes entrepreneur have enough market research and has great IDEA too, but the product they develop is not actually focussed or solves problem precisely. Product is hard to understand or operate. Lastly, even if you have succeeded in wining above two points, you may still fail, if your product is not scalable or is buggy. Imagine, you have done everything great and all of a sudden, now, your product can not sustain 1000 people at a time and is crashing every now and then. Switching code base is not easy and it could be very likely that until you plan to switch, some one else from some other place will take an advantage and enter the market with much proper scalable code. These are my personal opinion, you may have different thoughts.
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There are many factors why a startup can fail. Some of the most common include: **Not understanding the needs and wants of your clients/customers**, therefore not providing the right products/services. Research should be done before you create your product or service. I recommend doing “deep dive survey” as taught by Ryan Leveque in his book called “Ask” to get a deeper understanding of your prospects. **No funding**. Whether your idea is big or small, you still need to fund your startup as you have marketing, operations and perhaps inventory expenditure. Even though my business is all digital and I have no physical products, there’s still the expense of paying staff, maketing, and training. **Lack of management and leadership skills**. A startup is lead by you, the founder. No one else is responsible to lead the company. It has to start with why you’re doing what you’re doing. Refer to my answer in a relevant question: Aurelius Tjin's answer to What advice would you give to someone who is about to start entrepreneurship? **Trying to wear all the hats in the business**. As a startup, you’re tempted to try and do everything and be everything in the business. You’re trying to be the CEO, manager, technician and every other role that a business demands. From hiring people to managing my finances, I eventually learned to stick to my strengths and delegate my weaknesses. **No strategy**. When it comes to building a business, you need strategy in place. Every aspect should be purpose-driven or you don’t do it. This also goes for your content marketing strategy. Why are you creating that blog piece or video? To build brand awareness? To generate more leads? To build authority? **It’s like a failure waterfall:** If customers are indifferent to the problem, you fail. If customers are non-indifferent to the problem, but the solution you present triggers their immunities to change, you fail. If the customers are non-indifferent and the solution you present doesn’t trigger immunities, but you can’t build it, you fail. If the customers are non-indifferent and the solution you present doesn’t trigger immunities, and you can build it, but you can’t scale production or distribution in a profitable way, you fail. If the customers are non-indifferent and the solution you present doesn’t trigger immunities, and you can build it, and you can scale production or distribution in a profitable way, but you can’t build a team with a consistent culture that works together, you fail. (But you can probably get some money out.) If the customers are non-indifferent and the solution you present doesn’t trigger immunities, and you can build it, and you can scale production or distribution in a profitable way, and you can build a team with a consistent culture that works together, then congratulations, you’re a real company. You can still fail in lots of ways - bad management, economic downturn, effective competition, customers shift their situations, funding sources shift priorities, legislation changes, lightning strikes, etcetera. **You and/or your team runs out of patience.** It’s not uncommon for a 2+ year old startup to be grinding along, making the equivalent of beer money each month and still struggling to find product/market fit. The problem is that the team will often begin to lose sight of the big picture at this stage and quit just before the startup hits initial traction. This is by far the saddest scenario.
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