Starting up can be a nightmare. Everything can go wrong. Most things go wrong, that’s why greater percentage of new businesses fail. The opportunities are endless for new startups but a wrong decision can spell doom for your new project, idea and even the the whole company. Most entrepreneurs are risking everything to start a new business.

You think you are doing everything right until it all starts to crush right before your eyes. It’s a terrible feeling for founders who fail. The good news is, you are not your failure. You can always abandon projects that are not working and pursue new ones. Don’t hang on for too long if the signs are obvious that your present idea or business is about to take the fall. Fail fast and start over. There is no shame in that.

These symptoms originally shared on Quora can help you know if your startup is doomed to fail anytime soon.

 1. Inexperienced founder is CEO by default.  This is more common with tech founders IMO, who may be brilliant at what they do so they think managing a team and running a company is a piece of cake compared to what they build.  A company is an organization; a team of people with many different traits and skills, and if the founder is poor at motivating/managing/cultivating talent, people won’t stick around for long.

Bad behaviors include micromanaging, decision making that reflects poor “emotional quotient”, and insane expectations (“You’re going to have to increase your output by 10,000% because revenues weren’t as strong as I had hoped this quarter”, etc.)–Mark Schinkel, co-founder/CEO @Tablr

2. Founders lacks deep understanding of the market they are serving – often there are just too many nuances to a market that it takes years of living or working in the market to grasp it. Observers from the outside usually overestimate their understanding of a market. —Jason T Widjaja, Business plan competition judge and mentor

3. Failing to address and remove key hurdles that prevent (or slow) prospects from adopting.  The biggest hurdles are usually “understanding features and benefits” and “validating performance.” Beyond early adopters, few prospective customers are willing to spend time “figuring out” new products and, especially, answering the key question “why/how it’s better” (here is a more complete list of hurdles).–Phil Hendrix, Director immr and GigaOm Pro analyst

4. Lack of domain knowledge. We got completely conflicting advice at many points, but I was the consumer, so when we had equally smart people telling us opposite things, we went with our gut.

That gut feeling I think can really only be developed by being the consumer who will be using the product. Build it for yourself. When someone doesn’t have enough knowledge about the market they are targeting, more often than not they’ll take bad advice.–David Litwak, CEO of Mozio

5. Entrepreneurs ignore revenues and keep working towards the Perfect Product. While products are important, revenues pay the bill. If the startup has no clear plan to break even before the current resources run out, I would be sceptical about its future.

“We have runway and we will raise another round or something will happen” concept seems a bit too risky to me.
To be clear, there are startups like twitter and Facebook to which this rule does not apply, but they are mostly casual experiments gone immensely right! It is very rare to make a Facebook by design.–Samar Singla, CEO at Click Labs

6. Chosen market is too small – niches that are too costly for big players to pursue effectively (aka ‘loose bricks’) are generally a good place to start. But niches that are really specialised (think exotic foreign take out) are probably better off staying something other than a full fledged full time business.- —Jason T Widjaja, Business plan

7. Not enough focus on cashflow. If you are bootstrapping then cashflow extends the period before you start to eye your kid’s college fund and if you are looking for VC then you demonstrate that you understand the importance of maintaining a pulse as a stepping stone to health. The trick is to pursue activities that can generate cashflow that will not significantly delay the launch of your mainstream product.–Addison Chan

8. “Everything is fine now”. As an early stage investor, this simple statement is my number one alert. Another variation can be “I’m relaxed now” or something similar. A motivated CEO is constantly on his toes, even when the business is going well.

A strong CEO fighting for cash in a rough period will be stressed, angry, perhaps even depressed, and all these difficulties will be visible on his face. But when I hear ‘everything is just ok right now’, I know the person in front of me has suffered so much that he/she has finally dropped the case.–Cyril Bertrand

1 COMMENT

  1. Hi Thomas – Desire for perfection has been one of my personal struggles. But as I gradually fight off the annoying perfectionist trait my life has become less stressful.

    Naomi

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