{"id":50337,"date":"2021-12-14T07:49:25","date_gmt":"2021-12-14T15:49:25","guid":{"rendered":"\/us\/en\/blog\/?p=50337"},"modified":"2025-03-13T06:20:13","modified_gmt":"2025-03-13T13:20:13","slug":"why-startups-fail","status":"publish","type":"post","link":"\/us\/en\/blog\/why-startups-fail\/","title":{"rendered":"10 reasons why startups fail (and how to avoid them)"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Here&#8217;s a not-so-fun fact: recent <\/span><a href=\"https:\/\/www.investopedia.com\/articles\/personal-finance\/040915\/how-many-startups-fail-and-why.asp\"><span style=\"font-weight: 400;\">research shows<\/span><\/a><span style=\"font-weight: 400;\"> that around 90% of startups fail over a period of years:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>21.5%<\/b><span style=\"font-weight: 400;\"> of startups fail in the first year<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>30%<\/b><span style=\"font-weight: 400;\"> fail in the second year<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>50%<\/b><span style=\"font-weight: 400;\"> fail in the fifth year<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>70%<\/b><span style=\"font-weight: 400;\"> fail in the tenth year<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">It doesn\u2019t seem to matter whether the startup is a household name like WeWork or MoviePass, or if it was so small that no one would ever have heard of it outside a tiny and specific niche. Startups, in general, tend to be more likely to fold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The good news is, we know <em>why<\/em> these businesses go under, and we can learn something from these startup failures. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are some of the<\/span> <span style=\"font-weight: 400;\">top reasons<\/span><span style=\"font-weight: 400;\"> why <\/span><span style=\"font-weight: 400;\">startups fail<\/span><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#one\"><span style=\"font-weight: 400;\">Didn\u2019t understand the market<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#two\"><span style=\"font-weight: 400;\">Market conditions changed unexpectedly<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#three\"><span style=\"font-weight: 400;\">Bad timing<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#four\"><span style=\"font-weight: 400;\">Cash problems<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#five\"><span style=\"font-weight: 400;\">Flawed business plan<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#six\"><span style=\"font-weight: 400;\">Didn\u2019t hire the right people<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#seven\"><span style=\"font-weight: 400;\">Entered into a bad partnership<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#eight\"><span style=\"font-weight: 400;\">Failed to learn from mistakes and make adjustments<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#nine\"><span style=\"font-weight: 400;\">Lost the passion to succeed<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#ten\"><span style=\"font-weight: 400;\">Unforeseen crisis: A black swan event<\/span><\/a><\/li>\n<\/ol>\n<p>BONUS: This <a href=\"#bonus\">one solution<\/a> could solve a bunch of your startup&#8217;s problems.<\/p>\n<p>Let&#8217;s find out more about these warning signs and how you can avoid startup failure.<\/p>\n<hr \/>\n<p><strong>\ud83d\ude80 Is your companies communications system meeting todays demand?\u00a0<\/strong>Download our checklist to see if your communications are holding you back from better employee and customer experiences, ROI, productivity, and more.<\/p>\n<p><span style=\"font-weight: 400;\"><\/p>\n<div class=\"download-form-widget standart-download-form\" data-url=\"https:\/\/www.ringcentral.com\/pdf\/smb-communications-meeting-demands.html\" data-id=\"69d4960620877\" id=\"69d4960620877\">\n\t\t<button tabindex=\"on\"  on=\"tap:69d4960620877.toggleClass(class='open')\" class=\"open-modal-download-action download-form-button\" type=\"submit\">See how you measure up<\/button><\/p>\n<div class=\"download-form-modal\">\n<div class=\"download-form-modal-body\">\n<div class=\"download-form-modal-content\">\n<div class=\"download-form-modal-title\">Learn if your communications system is holding you back<\/div>\n<form class=\"download-form SMB\" method=\"post\">\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<input class=\"download-form-input\" aria-label=\"Full Name\" aria-required=\"true\" aria-invalid=\"false\" type=\"text\" name=\"fullname\" placeholder=\"Full Name\" data-dl-events-hover=\"true\" data-dl-element=\"text\" data-dl-additional-info=\"download form\">\n\t\t\t\t\t\t<\/div>\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<input class=\"download-form-input\" aria-label=\"Email (please enter a work email address)\" aria-required=\"true\" aria-invalid=\"false\" type=\"email\" autocomplete=\"on\" name=\"email\" placeholder=\"Email (please enter a work email address)\" data-dl-events-hover=\"true\" data-dl-element=\"email\" data-dl-additional-info=\"download form\">\n\t\t\t\t\t\t<\/div>\n<div>\n\t\t\t\t\t\t\t<input type=\"hidden\" name=\"popup_form\" value=\"1\">\n\t\t\t\t\t\t<\/div>\n<div><input type=\"hidden\" name=\"Asset_ID__c\" value=\"ODAM-03830 \" class=\"download-form-input\"><\/div>\n<div>\n\t\t\t\t\t\t\t<input type=\"hidden\" name=\"Lead_Entry_Source__c\" value=\"RC Blog\" class=\"download-form-input\"\/>\n\t\t\t\t\t\t<\/div>\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<button class=\"download-form-submit\" type=\"submit\" data-dl-element=\"button\" data-no-auto-dl=\"true\" data-dl-additional-info=\"download form\" data-dl-name=\"Get the checklist\">Get the checklist<\/button>\n\t\t\t\t\t\t<\/div>\n<\/p><\/form>\n<p> \t\t\t\t\t<button on=\"tap:69d4960620877.toggleClass(class='open')\" role=\"button\" tabindex=\"0\"  class=\"download-form-modal-close\"><\/button>\n\t\t\t\t<\/div>\n<div class=\"download-form-modal-thank\"> Enjoy!<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p><\/span><\/p>\n<hr \/>\n<h2 class=\"heading h2\">10 common reasons why startups fail<b><\/b><\/h2>\n<h3 class=\"heading h3\"><a id=\"one\"><\/a>1. Failed to understand\/gauge the market<\/h3>\n<p><span style=\"font-weight: 400;\">Many <\/span><span style=\"font-weight: 400;\">entrepreneurs<\/span><span style=\"font-weight: 400;\"> go into a startup pumped about a new idea, with grand visions of selling a million units in the first year, but without an accurate understanding of the <\/span><span style=\"font-weight: 400;\">market need<\/span><span style=\"font-weight: 400;\"> for their item. It&#8217;s impossible to <a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/driving-innovation-as-a-tech-company-whats-the-secret\/\">drive meaningful innovation<\/a> without a full concept of what&#8217;s out there.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Surely everyone wants their latest gizmo or gadget,<\/span><span style=\"font-weight: 400;\"> startup founders <\/span><span style=\"font-weight: 400;\">reason, and if they can get a few investors to provide enough <\/span><span style=\"font-weight: 400;\">venture capital<\/span><span style=\"font-weight: 400;\">, they can be in business for a time before they figure out that they\u2019ll never make the kind of profit they think they will.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The market is an incredibly complex beast, so it\u2019s no wonder many startups can\u2019t reliably figure out their <\/span><span style=\"font-weight: 400;\">chances of success<\/span><span style=\"font-weight: 400;\"> accurately. While there are models and tools that can provide <\/span><span style=\"font-weight: 400;\">insights <\/span><span style=\"font-weight: 400;\">into the possibility of <\/span><span style=\"font-weight: 400;\">entrepreneurial success<\/span><span style=\"font-weight: 400;\">, there are also many times when there is really no way to predict success or failure until you get the product to market and simply see how it does.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"two\"><\/a>2. Changing market conditions<\/h3>\n<p><span style=\"font-weight: 400;\">Sometimes those involved in a startup have an accurate view of the market, but then market conditions change before they are established enough to weather those changes.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The coronavirus <\/span><span style=\"font-weight: 400;\">pandemic <\/span><span style=\"font-weight: 400;\">was a perfect example of changing market conditions that caused many businesses to struggle or fail. Shutdowns and capacity restrictions caused many retail businesses and restaurants to see their volume decrease dramatically, and it took many months for some customers to feel comfortable enough to come back.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For some startups in their <\/span><span style=\"font-weight: 400;\">early days<\/span><span style=\"font-weight: 400;\"> without much profit to fall back on and without an established customer base, the huge market changes were too much for them to weather and the entire venture amounted to not much more than a series of <\/span><span style=\"font-weight: 400;\">false starts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, small businesses are being hit with labor shortages that have forced some to cut their hours or make due with fewer <\/span><span style=\"font-weight: 400;\">team members<\/span><span style=\"font-weight: 400;\"> to handle vital aspects of the business. These challenges will no doubt lead to <\/span><span style=\"font-weight: 400;\">failure patterns<\/span><span style=\"font-weight: 400;\"> that could be long-lasting, especially for some brands that were already struggling before the pandemic.<\/span><\/p>\n<div class=\"rc-subscribe\" id=\"new-rc-subscribe\"  style=\"background-image:url('\/us\/en\/blog\/wp-content\/themes\/ringcentral\/assets\/images\/temp\/subscribe.png')\">\n\t\t<button class=\"close js-popup-close\"><svg class=\"icon_close_mobile\" width=\"20\" height=\"20\"><use xlink:href=\"#icon_close_mobile\"><\/use><\/svg><\/button><\/p>\n<div class=\"rc-subscribe__wrapper\">\n<div class=\"rc-subscribe__wrapper_text\">\n<h3 class=\"rc-subscribe__title h2\">Stay informed with RingCentral<\/h3>\n<div class=\"rc-subscribe__subtitle\">Subscribe to our emails for the latest blogs, events, and exclusive content on AI-powered communication solutions. Stay ahead with insights and tips from the leader in trusted AI communications.<\/p>\n<p>\t\t\t\t\t<a href=\"https:\/\/www.ringcentral.com\/legal\/privacy-notice.html\" target=\"_blank\" data-dl-name=\"Privacy Notic\" data-dl-element=\"link\" data-dl-additional-info=\"social\" rel=\"noreferrer noopener\">Privacy Notice<\/a>\n\t\t\t\t<\/div>\n<\/p><\/div>\n<div class=\"rc-subscribe__wrapper_form\">\n<form class=\"\" data-event-init=\"true\" novalidate data-js-form>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<input\n\t\t\t\t\t\t\t\tname=\"email\"\n\t\t\t\t\t\t\t\tplaceholder=\"Email address *\"\n\t\t\t\t\t\t\t\ttitle=\"Must be valid email. example@yourdomain.com\"\n\t\t\t\t\t\t\t\tminlength=\"4\"\n\t\t\t\t\t\t\t\tmaxlength=\"255\"\n\t\t\t\t\t\t\t\ttype=\"email\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tpattern=\"[a-z0-9._%+\\-]+@[a-z0-9.\\-]+\\.[a-z]{2,}$\"\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\tautocomplete=\"on\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-events-hover=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"email\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"LET'S WORK TOGETHER\"\n\t\t\t\t\t\t\t\taria-label=\"Email address *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"email-subscribe-errors\"\n\t\t\t\t\t\t><br \/>\n\t\t\t\t\t\t<span class=\"field__errors\" id=\"email-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<select\n\t\t\t\t\t\t\t\tname=\"Country__c\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\taria-expanded=\"false\"\n\t\t\t\t\t\t\t\taria-label=\"Country *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"country-subscribe-errors\"\n\t\t\t\t\t\t><option value=\"\" disabled=\"disabled\" selected=\"selected\">Country<\/option><option value=\"Canada\">Canada<\/option><option value=\"United_States\">United States<\/option><\/select><\/p>\n<p>\t\t\t\t\t\t<span class=\"field__errors\" id=\"country-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<button type=\"submit\" data-event-init=\"true\">Subscribe<\/button>\n\t\t\t\t\t<\/div>\n<\/p><\/form>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"confirm-form\" role=\"status\" aria-live=\"polite\" style=\"display: none;\" aria-hidden=\"true\">\n<div class=\"confirm-form__text\">Thank you for your interest in RingCentral<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<h3 class=\"heading h3\"><a id=\"three\"><\/a>3. Bad market timing<\/h3>\n<p><span style=\"font-weight: 400;\">Sometimes a startup has a great idea, but doesn\u2019t time a major product launch or marketing push well. Unfortunately, it may only take one ill-timed move to cause the startup to fail, if investors get wind of the poor decision-making and decide to bail.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some ideas have just been ahead of their time, like Google precursor Ask Jeeves or grocery delivery service WebVan. The concepts were great, but not enough people saw the need for the service, or it just seemed too \u201cout there\u201d because nothing else like it existed yet.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other ideas have been poorly marketed from a timing perspective, such as launching a holiday-themed marketing campaign after the holidays or trying to do a major product launch without building any buzz around the product first.<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"four\"><\/a>4. Cash flow issues<\/h3>\n<p><span style=\"font-weight: 400;\">Another reason for <\/span><span style=\"font-weight: 400;\">startup failure <\/span><span style=\"font-weight: 400;\">is simply running out of money. Most startups rely on investors and venture capitalists to fund them until their product or service starts making money, and if that doesn\u2019t happen fast enough, investors often balk at continuing to fork over cash for an extended period of time.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If the startup doesn\u2019t make sufficient efforts to find new capital as the original capital dries up, it will soon find it can\u2019t meet operating expenses under the <\/span><span style=\"font-weight: 400;\">business model <\/span><span style=\"font-weight: 400;\">\u00a0envisioned.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cash flow<\/span><span style=\"font-weight: 400;\"> problems are extremely common among startups, and are one of the <\/span><span style=\"font-weight: 400;\">top reasons<\/span><span style=\"font-weight: 400;\"> for startups to <\/span><span style=\"font-weight: 400;\">shut down.<\/span><span style=\"font-weight: 400;\"> Even if the problem isn\u2019t investors backing out,<\/span><span style=\"font-weight: 400;\"> new businesses<\/span><span style=\"font-weight: 400;\"> can fail if they don\u2019t meet <\/span><span style=\"font-weight: 400;\">customers\u2019 needs<\/span><span style=\"font-weight: 400;\"> or if their <\/span><span style=\"font-weight: 400;\">pricing<\/span><span style=\"font-weight: 400;\"> is too high or too low.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\t\t\t<\/p>\n<div class=\"rc-bottom-cta rc-bottom-cta__landscape\" style=\"background-color:#FF8800;flex-direction: row-reverse;\">\n<div class=\"bottom-cta-img\">\n\t\t\t\t\t<img decoding=\"async\" width=\"930\" height=\"700\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2024\/05\/Blog-hero-4.png\" class=\"responsive-image\" alt=\"Read our new ...\" \/>\t\t\t\t<\/div>\n<div class=\"bottom-cta-copy\">\n<div class=\"rc-bottom-cta__text\" style=\"color:ffffff;\">\n<h3\n\t\t\t\t\t\t\t\tclass=\"rc-bottom-cta__title headline-copy\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t>Read our new report, <\/span><i><span style=\"font-weight: 400;\">How AI is Changing Employee &amp; Customer Experiences,<\/span><\/i><span style=\"font-weight: 400;\"> to learn how top-performing companies are deploying AI to benefit their customers and employees<\/h3>\n<\/p><\/div>\n<div class=\"rc-bottom-cta__btn-wrapper\" style=\"\">\n\t\t\t\t\t\t<a\n\t\t\t\t\t\t\t\tclass=\"btn btn-primary btn-lg rc-bottom-cta__link\"\n\t\t\t\t\t\t\t\ttitle=\"Read now\"\n\t\t\t\t\t\t\t\thref=\"https:\/\/www.ringcentral.com\/report\/ai-changing-employee-customer-metrigy-report.html\"\n\t\t\t\t\t\t\t\tdata-dl-name=\"Read now\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"button\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"bottom cta banner\"\n\t\t\t\t\t\t\t\tdata-no-auto-dl=\"true\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t\t\tonmouseover=\"\"\n\t\t\t\t\t\t\t\tonmouseout=\"this.style.backgroundColor='';this.style.borderColor='';this.style.color='';\"\n\t\t\t\t\t\t>Read now<\/a>\n\t\t\t\t\t<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>\t<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"five\"><\/a>5. Flawed business plan<\/h3>\n<p><span style=\"font-weight: 400;\">Having a business plan is Startup 101, and just about everyone knows you\u2019re supposed to have one in the <\/span><span style=\"font-weight: 400;\">early-stages<\/span><span style=\"font-weight: 400;\"> of any <\/span><span style=\"font-weight: 400;\">small business<\/span><span style=\"font-weight: 400;\">. But just because you have a business plan doesn\u2019t mean it\u2019s a good one.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A flawed business plan doesn\u2019t take into account factors that later become important, and can cause <\/span><span style=\"font-weight: 400;\">business failure<\/span><span style=\"font-weight: 400;\"> rather than <\/span><span style=\"font-weight: 400;\">startup success<\/span><span style=\"font-weight: 400;\">. Some <a href=\"https:\/\/bizplanr.ai\/blog\/business-plan-mistakes\">common business plan flaws<\/a> include being too vague, miscalculating costs, underestimating timelines for production or marketing, and getting key facts wrong when researching the market, as stated above.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You don\u2019t have to go to <\/span><span style=\"font-weight: 400;\">Harvard Business School<\/span><span style=\"font-weight: 400;\"> to make a successful business plan, but it does help to get assistance from those with real-world experience who may be able to point out your flaws so you can correct them sooner rather than later.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"six\"><\/a>6. Poor recruitment practices<\/h3>\n<p><span style=\"font-weight: 400;\">Entrepreneurship<\/span><span style=\"font-weight: 400;\"> only works when startups can hire the right people for their venture. While some characteristics of good employees are fairly universal, such as people skills, perseverance, and the ability to problem-solve, you may need more specialized skills for some positions if you want to be one of the startup <\/span><span style=\"font-weight: 400;\">success stories<\/span><span style=\"font-weight: 400;\"> people hear so much about.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most successful startups will credit their team for much of their success because unique people with creative ideas are better at figuring out how to make things work in the best possible way. The personality and character of your top team members is often reflected in the organization in crucial ways.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Similarly, if key staff have serious flaws, those are also likely to be reflected in the organization and often contribute significantly to its failures.<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"seven\"><\/a>7. A weak foundational partnership<\/h3>\n<p><span style=\"font-weight: 400;\">When <\/span><span style=\"font-weight: 400;\">co-founders <\/span><span style=\"font-weight: 400;\">of a startup don\u2019t work well together, it often makes startup success difficult or impossible. Communication can be a major problem for partnerships that are not built on a shared vision and values.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Partners don\u2019t have to be exactly alike; in fact, it\u2019s usually better for the startup if they have different but complementary strengths and weaknesses. But they need to be on the same page and want the same things for the company. Otherwise, it will cause conflict eventually.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Partnerships don\u2019t usually start off badly. As time goes on, however, some partners learn that their interests and goals for the startup don\u2019t align well, and at that point the startup is at risk for failure unless its leadership can find a common path forward together.<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"eight\"><\/a>8. Failure to learn from mistakes\/make adjustments<\/h3>\n<p><span style=\"font-weight: 400;\">In any startup, there are going to be mistakes, miscalculations, and failures. Most startups don\u2019t have a straight line to success, but have many ups and downs along the way.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the most <\/span><span style=\"font-weight: 400;\">common reasons<\/span><span style=\"font-weight: 400;\"> for startup failure is that the startup was unable to learn from the inevitable mistakes and make adjustments to become more successful.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Persistence is very important for startups, but if adjustments to a better way of doing things doesn\u2019t also take place, a startup may persist itself right out of business. Persistence only works if the business model is sound and the right decisions are made along the way.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><a id=\"nine\"><\/a>9. Burnout\/loss of passion for the startup<\/h3>\n<p><span style=\"font-weight: 400;\">Many startup founders have an attention span problem: they fall in love with an idea, but get tired of it before it can reach its full potential and want to move on to the next great idea.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When the leadership of a startup loses its passion for the concept or product, or burns out on the idea too early, the startup will likely fail. In some cases, founders can sell the startup to someone else who can take their idea and run with it or fold it into their own concept.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately, few business owners that burn out or lose their passion ever regain it (at least not for the original idea). The urge to move on to something else has been a major factor in startup failure for a long time because of the creative and restless nature of many startup founders.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\"><a id=\"ten\"><\/a>10. Unforeseen market crisis: A black swan event\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Market changes are one thing\u2026 but what about a market crisis that <\/span><i><span style=\"font-weight: 400;\">no one<\/span><\/i><span style=\"font-weight: 400;\"> could have seen coming? COVID-19\u2019s impact on the global economy was a classic case of a <\/span><i><span style=\"font-weight: 400;\">black swan event<\/span><\/i><span style=\"font-weight: 400;\">: completely unforeseen, and devastating for a lot of small businesses and startups.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While no business was ready for a global shutdown, some were able to survive\u2014even thrive\u2014through the crisis. This includes <a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/pandemic-startup-surge\/\">startups, who surged during the pandemic<\/a>. because they had invested in tech stacks that helped them operate, and communicate, 100% remotely.\u00a0<\/span><\/p>\n<h2 class=\"heading h2\"><span style=\"font-weight: 400;\"><a id=\"bonus\"><\/a>Startup failure tips: One app could help you stay afloat<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It\u2019s often hard to pinpoint one reason things went belly-up. In most cases, more than one of the above factors is to blame.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We have something in mind that can alleviate a whole bunch of startup issues before they begin: an all-in-one communications platform like RingCentral. Yes, we\u2019re tooting our own horn a little here, but hear us out. Let\u2019s look at some of the reasons why <a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/why-all-startups-need-the-cloud\/\">the cloud is right for startups<\/a>:<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Faster communication with customers, team members, and investors\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A <a href=\"https:\/\/www.ringcentral.com\/solutions\/office\/call.html\">cloud phone system<\/a> turns any mobile device into your <a class=\"waffle-rich-text-link\" href=\"https:\/\/www.ringcentral.com\/lp\/small-business-phone-service.html\">business phone<\/a>, so you\u2019re never far from your \u201cdesk.\u201d Whether you\u2019re running between client meetings or in the office, your people can reach you and you can reach them.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Fewer long, confusing email chains\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Don\u2019t let important conversations get sucked into the void. Beyond powerful business phone features, a solid unified communications platform (like RingCentral) includes team messaging, right in the same app as your phone, so no conversations are lost.<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Recruit from a global talent pool\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">One huge reason to get your startup on the cloud ASAP: access to talent beyond your local footprint. You can easily interview and onboard remote team members with a communications app like RingCentral.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Clear up misunderstandings more quickly<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">We\u2019ve all been the victim\u2014and perpetrator\u2014of misreading the tone of an email or text message. When things get complicated, there\u2019s nothing like a face-to-face conversation to clear things up. With RingCentral, you can flip from messaging to video in one click, so everyone can get back to work with the right information:\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Add a personal touch with CRM integrations<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Everything and everyone is online today, but that doesn\u2019t mean humans don\u2019t still value personal connection. RingCentral integrates with big CRMs like Salesforce, Zoho, and more. This means you have every contact\u2019s history with your startup at your fingertips on any call:\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-43712\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/09\/Jupiter-blue.png\" alt=\"ringcentral salesforce integration\" width=\"930\" height=\"700\" \/><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Get (and stay) organized\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">How much time does your team spend digging through emails for an important attachment? RingCentral is a lot more than a powerful phone system; it includes dynamic team messaging that allows you to share, comment on, and store files right in the app.\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-43589\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/09\/file-sharing-in-the-ringcentral-app.gif\" alt=\"file sharing in the ringcentral app\" width=\"800\" height=\"633\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Plus, RingCentral makes it easy to find whatever you\u2019re looking for with a search function the ability to pin important links.\u00a0<\/span><\/p>\n<h3 class=\"heading h3\"><span style=\"font-weight: 400;\">Other ways a cloud communications app can help your startup stay viable<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While <a href=\"https:\/\/www.ringcentral.com\/lp\/small-business-phone-service.html\">business phone service<\/a>, <a href=\"https:\/\/www.ringcentral.com\/video-call.html\">video call<\/a>, <a href=\"https:\/\/www.ringcentral.com\/free-conference-call.html\">conference call services<\/a>, and team messaging are four of our most critical features for startups, RingCentral also offers: <\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Voicemail transcription\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Internet fax<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Service reports<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Integrations with Office, Google Workspace, Slack, Box, and more<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Call recording<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hot desking<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Analytics<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Data storage<\/span><\/li>\n<li><a href=\"https:\/\/www.ringcentral.com\/virtual-call-center.html\">Virtual call center<\/a><\/li>\n<li aria-level=\"1\"><a href=\"https:\/\/www.ringcentral.com\/call-center-management.html\">Call center management<\/a><\/li>\n<li aria-level=\"1\"><a href=\"https:\/\/www.ringcentral.com\/contact-center\/workforce-management.html\">Workforce management<\/a><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This kind of easy-to-adopt technology can help startups function better, and maybe even do more than you thought was possible.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These are just a few of the ways in which a full-featured phone system from RingCentral can help your startup survive and thrive. With communication technology that enhances rather than impedes your business functioning, it\u2019s easy to see why RingCentral just may be the asset your business cannot live without.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/ringcentral.com\/startup\"><span style=\"font-weight: 400;\">See our startup solutions<\/span><\/a><span style=\"font-weight: 400;\"> for more information about how a RingCentral MVP\/Video package may be exactly what your startup needs right now.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here&#8217;s a not-so-fun fact: recent research shows that around 90% of startups fail over a period of years:\u00a0 21.5% of startups fail in the first year 30% fail in the second year 50% fail in the fifth year 70% fail in the tenth year It doesn\u2019t seem to matter whether the startup is a household &#8230;<\/p>\n","protected":false},"author":1207,"featured_media":58048,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17901,18722],"tags":[],"class_list":["post-50337","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-leadership","category-startups"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.3 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>10 reasons why startups fail<\/title>\n<meta name=\"description\" content=\"Only 10% of startups are able to stay alive and thrive. 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Find out why so many startups fail before they begin and how to stave off startup failure.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/why-startups-fail\/\" \/>\n<meta property=\"og:site_name\" content=\"RingCentral Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ringcentral\" \/>\n<meta property=\"article:published_time\" content=\"2021-12-14T15:49:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-13T13:20:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/wp-content\/uploads\/2021\/12\/Change-this-2.png\" \/>\n\t<meta property=\"og:image:width\" content=\"960\" \/>\n\t<meta property=\"og:image:height\" content=\"540\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Meghan Corasaniti\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ringcentral\" \/>\n<meta name=\"twitter:site\" content=\"@ringcentral\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Meghan Corasaniti\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"11 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/why-startups-fail\/#article\",\"isPartOf\":{\"@id\":\"\/us\/en\/blog\/why-startups-fail\/\"},\"author\":{\"name\":\"Meghan Corasaniti\",\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/#\/schema\/person\/bf2e907cfafb51d4ddb0087b4eeb685f\"},\"headline\":\"10 reasons why startups fail (and how to avoid them)\",\"datePublished\":\"2021-12-14T15:49:25+00:00\",\"dateModified\":\"2025-03-13T13:20:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"\/us\/en\/blog\/why-startups-fail\/\"},\"wordCount\":2286,\"publisher\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/why-startups-fail\/#primaryimage\"},\"thumbnailUrl\":\"\/us\/en\/blog\/wp-content\/uploads\/2021\/12\/Change-this-2.png\",\"articleSection\":[\"Business &amp; leadership\",\"Startups\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"\/us\/en\/blog\/why-startups-fail\/\",\"url\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/why-startups-fail\/\",\"name\":\"10 reasons why startups fail\",\"isPartOf\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/why-startups-fail\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/why-startups-fail\/#primaryimage\"},\"thumbnailUrl\":\"\/us\/en\/blog\/wp-content\/uploads\/2021\/12\/Change-this-2.png\",\"datePublished\":\"2021-12-14T15:49:25+00:00\",\"dateModified\":\"2025-03-13T13:20:13+00:00\",\"description\":\"Only 10% of startups are able to stay alive and thrive. 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She holds a Bachelor\u2019s degree in Marketing and International Business and is always eager to embrace new challenges and contribute to the evolving landscape of marketing.","sameAs":["https:\/\/www.linkedin.com\/in\/meghan-corasaniti\/"],"url":"\/us\/en\/blog\/author\/meghan-corasaniti\/"}]}},"rc_img_url":"\/us\/en\/blog\/wp-content\/uploads\/2021\/12\/Change-this-2.png","rcblog_by_author":"<a href=\"\/us\/en\/blog\/author\/meghan-corasaniti\/amp\" data-dl-events-click=\"true\" data-dl-element=\"link\"><span class=\"image\"><img src=\"https:\/\/secure.gravatar.com\/avatar\/2c53fea3fdd525086b317b6bbf2e2250add1aec56ecd28265ec77def091fc756?s=96&d=mm&r=g\" alt=\"\" width=\"30\" height=\"30\" layout=\"fixed\"><\/img><\/span><span class=\"by-author-name\">Meghan Corasaniti<\/span><\/a>","rc_author_full_name":"Meghan Corasaniti","rc_author_avatar":"\/us\/en\/blog\/wp-content\/uploads\/2024\/06\/meghan.corasaniti.png","rc_author_link":"\/us\/en\/blog\/author\/meghan-corasaniti\/amp","rc_post_categories":"<a href=\"\/us\/en\/blog\/category\/trending\/business-leadership\/amp\">Business &amp; leadership<\/a><a href=\"\/us\/en\/blog\/category\/verticals\/startups\/amp\">, Startups<\/a>","amp_link":"\/us\/en\/blog\/why-startups-fail\/amp","excerpt_title":"10 reasons why startups fail (and how to avoid them)","_links":{"self":[{"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/posts\/50337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/users\/1207"}],"replies":[{"embeddable":true,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/comments?post=50337"}],"version-history":[{"count":0,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/posts\/50337\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/media\/58048"}],"wp:attachment":[{"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/media?parent=50337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/categories?post=50337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/wp-json\/wp\/v2\/tags?post=50337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}