Most Common Mistakes That Every Startup Makes

There are a lot of start-ups in the industry, but only a few are successful. And most of them make the most common mistakes which lead to start-ups failure. We are here to discuss the most critical and common mistakes that every startup makes to help you understand better of the startups' world.

You may be thinking you have a unique idea or an invention which may rock the startup world but here is where everyone makes a mistake without realizing it.

Want your startups to reach heights and don’t want to commit the same mistakes that every other startup makes; then here are the top most severe mistakes that every startup makes:


A lot of times startups fail due to the lack of demand for that particular idea or invention. Many commence their business with a unique approach but fail due to:

• Scarcer demand for that product or service.

• The service or product is not able to provide a solution to already existing problems.

• A product or service may also fail due to the insufficient requirement in the current generation but may be useful in the future.

• When a product or service is bounded by the lack of technology, which is a product that is ahead of its time, and unique.


Many startups initiate their business with an adequate amount of funds. Here is what goes wrong:

• Few startups may receive a lot of funding, but they miscalculate or misallocate their spending and run out of cash.

• Expenses on marketing and advertising are more than the earnings from the conversions.

• Sometimes startups run in short of funds to complete or cover their operation which will lead to a short runway of business; though the demand is high. The most relatable example is Kingfisher airlines – Though they did have huge demand and customers, they ran out of funds and went on debt because the owner miscalculated and misused his funding.

• Some startups also fail due to the use of profit for personal use instead of investing back in their own business. Startups need a continuous flow of funding at the beginning years.


Every company aims to satisfy consumer needs by providing products and services. But a lot of times while launching their product they focus only on solving a problem and forget about all the other factors that are quintessential for fulfilling consumer needs.

• Poor quality of the product.

• Non-user-friendly product.

• A product is solving one problem but creating a new one.

• There is also one more mistake that every startup makes, i.e., the company acquires many consumers and provide them with their services, but fail to resolve customer complaints and provide poor after sales services. 

For example: A broadband provider offers services to many customers but when the company receives complaints and requires proper technical support, but the company fails to do so, gaining negative publicity and criticism from the customers, eventually losing out loyal customers.


Legal issues are the most common mistakes that startups make. They usually try to tackle or leave some of the related legal work for later which could cost them hefty. But you don’t want to make the same mistake.

• Private Limited Companies should always make sure they have registered their company under Pvt Ltd Company Registration before starting any business transaction.

• Never leave legal work for later, or it could cost you hefty. Many startups think we don’t need to register now for a trademark or company as it is not even yet properly established and hence can be done later.

• Ignorance of legalities; setting up a startup is a substantial task. And need a lot of permissions are required to be completed by the government; Ministry of corporate affairs in India has set a lot of rules for starting up of a company which needs to be followed by every startup. 

Even at the same time to enjoy various government policy one need to get their GST registration done. But these legal tasks are equally sturdy and boring. Hence, many people ignore it, which leads to the failure of the company.


Competitors effect can be hazardous for the business. Startups usually never consider the threat a competitor can be. A competitor should never be underestimated. He has all the power and potential to outrun you in the race of business.

• Before starting up a company, many startups don’t realize whom they are competing to.

• They don’t even check how many startups are there already in the niche.

• And do not study their competitors; Which is the most important step that every startup should follow, they should first study their competitor and should do a SWOT analysis on their competitors.

• For healthy practice, it is advisable to keep an eye on every step that the competitors take; This will not only help us understand competitor better but will also help us and give us an opportunity to outrunning the competitors. 

For example, the battery of the Samsung Galaxy Note 7 combusting due to design failure gave the competitors the chance to exceed their business.


Not knowing where to start, whom to market, whom to target, etc.; is the most common problem faced by startups, they don’t even know their right target audience. Before marketing one should understand all the aspects of the product, where to start marketing(location), which type of market to target and who are all my target audience.

If one is marketing without knowing all these factors; then he is going to away with a dead end. He is never reaching out to the right consumer who genuinely wants the product. Hence leads to startup failure.

Here are a few points or goal which should be kept in mind before marketing:

• Introduction: Marketing helps in introducing you to consumers. So that consumer gets to know you are also in the market.

• Branding: After the introduction stage, Marketing helps you to build Brand for your organization.

• Growth: After branding, one can achieve their most essential step, i.e., growth. In this stage, one can get conversions, and consumer interact happens.
After reaching the growth stage, one should again do re-branding as to remain in the market for the long term.

Marketing without any target to achieve is like sailing a boat with a hole.

Many startups do marketing for achieving conversions without Introduction and branding. And they do also get conversions, but they are very few in numbers and replenishes quickly.


Most common errors that startups make is that they launch their product at the wrong time. They do not consider the factor of Demand and supply.

Demand and supply play the most crucial role in the market. One should wait and start his business when demand is high, and supply is low. 
For example: Starting a construction business will be successful when there is a huge demand for construction work and supply is low; Like in underdeveloped cities.

• Opportunity & Timing: The right time when most of the business succeeds is when there is a recession; During the recession, there is a lot of opportunities for new business to grow and flourish in the market.

Climate: Climate also plays a very tiny but essential role. For say, Ice-cream business will be more successful in summers than winters.


Pricing of a product or service for startups should be as low as possible even though your product is of a luxury class. The price of a product or service should be set in such a way that it covers all your expenses and operation cost and also able to earn a profit.

Startups tend to launch a product at a price range, of thinking as a unique and luxury product and thus fails to establish themselves in the market.

Hope you understood how market runs and how can you avoid a startup to be a fail. Let us know your thoughts in comments.

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