2 mistakes that make startup failure inevitable

Startup failure

The amount of startups is rapidly growing. The United States is the leading country by the number (70,762) by a long shot. The second on the list is India, with just 12,556 startups, and the third spot is occupied by the UK, with 6,155 startups. Impressive, isn’t it? But the truth is 

MVP Minimum Viable Product 72 × 10 дюйм. 1

The startup failure rate (Failory) shows — the main reason founders and investors blamed for their startup failures is a cash flow problem (82%) — besides this statement, we want to pinpoint some vast prerequisites leading to the main hurdle. 

Throughout the research, our team has found two main and essential difficulties that have been interchangeable across surveys and seasons for years.

Startup failure begins with bad idea

Too often, young entrepreneurs dream about a flourishing business journey, being so highly inspired by Google or Apple (multi-billion-dollars companies that started in a garage), so at least they forget about the product. 

Enthusiasm is a strong power, but sometimes you need ​​to get your head out of the clouds if you are not interested in producing a poor or even implausible product.

All over the world, creators believe in their genius ideas, thinking they deserve success just because of their attachment to the project. Unfortunately, it doesn’t work without diligent customer research.

It is better to engage potential customers on the idea stage, but even though, founders might be blinded by their visions instead of carefully listening to the customers’. 

We made a shortlist of some sobering questions. Just ask yourself to ensure that your idea passes.

  • Is there any market issue your product solves?
  • Does it match your customer’s expectations or needs? 
  • Have you described your customer model? What does he/she look like?
  • Is your customer ready to pay for your product?

The conclusion of this point is:

  1. If you ask the questions, be ready to listen, and be attentive to your research.
  2. Don’t turn a deaf ear if your customers tell you they would not buy your product. It might be unnecessary/costly/poorly designed, then genuinely it is so. In that case, save your resources and find out what else you can do. 

Even a stunning idea is doomed to fail without quality management and development

Long story short, you will never avoid a human factor during all startup stages. So, let’s figure out the main difficulties bounded with the team, process, and wrong priorities, appearing at the development phase.

Development speed matters

  1. The brisk pace of technological development creates a rivalry and oversupply in the markets—consequently, numerous concepts become outdated quickly.
  2. You should verify if customers positively perceive the product. Considering two developing strategies will help you to reduce production costs and test the idea as soon as possible
MVP Minimum Viable Product

Wrong developing team

Well-skilled developers are expensive to hire, and entrepreneurs replace in-house programmers with freelancers, having little control over them. That’s why the consequences mainly are trivial.

From inexperienced developers, you should expect the neglecting non-coding issues such as architecture, design, testing, configuration management, deployment, and documentation. At least, the delivered product does not meet the punter’s requirements. It is unreliable, and it takes a long time to correct the defects, often creating other bugs.

MVP Minimum Viable Product 1

Even if your project is on a low budget, don’t panic. The most reasonable choice regarding startup creation is hiring a dedicated team with a principal experienced developer. This person must also be an accomplished technical manager, as he will need to influence their less-skilled associates. 


In MagnificSoft, we are building remote dedicated teams tailored to the specifics of your project and performance expectations, so you can be sure the project is in good hands. An experienced team always can show some case studies of previous projects, so you can check the skills even before the interview.

MVP Minimum Viable Product 2

Choosing the wrong technology

It is a perfect scenario when startup management includes a technical director. CTO picks the technologies driven by his business goals, budget, and challenges, not personal preferences. But in general, at the head of the project stands a non-technical founder. And on this account, there is a tremendous risk picking the newest technologies (languages, frameworks, tools) that are trendy and cool but unsuitable in the particular development process.

Using inappropriate technologies — developers have never used before — will definitely increase budgeting and timing. To avoid these problems, startups need to consider several important things:

  • What problem is going to be solved by the product?
  • What is the product’s functionality?
  • What level of experience do developers have? 
  • What are the deadlines and expected development speed?
  • Does the technology drive your business or complement a business model?

Since startup founders have an option to work with a dedicated outsourced team, they can consult with developers and technical experts within the project, contemplating developers’ technology stack. 

Also, you can hire MagnificSoft experts and senior developers on an hourly basis — some rational guides can save your startup a lot of money in the long run. 

Lessons learned

  • Consider making a small-scale prototype and MVP before starting a full-fledged development. It ensures saving your resources in case some functional elements do not add user value to the product.
  • About 1% of startups evolve into unicorn startups, like Uber, Airbnb, Slack, Stripe, and Docker (CBInsights). The reason for their success is the idea and effective problem-solving! Make sure that users need your product and listen to market research and customers’ feedback.
  • Hiring in-house developers is an expensive task. But hiring a dedicated team that has experience with startups development is a solution and a great relief for you as a founder. 

Software development is the most laborious process for founders in the startup stages, but most challenges are the same. Thus, learning from others’ startup failures and choosing the right team can significantly lessen these struggles. 

Leave a message if you have any questions. We know how to help your business grow!