{"id":366,"date":"2025-01-16T11:49:59","date_gmt":"2025-01-16T11:49:59","guid":{"rendered":"https:\/\/mechsoftgroup.com\/blog\/?p=366"},"modified":"2026-04-09T07:30:52","modified_gmt":"2026-04-09T07:30:52","slug":"why-do-startups-fail","status":"publish","type":"post","link":"https:\/\/mechsoftgroup.com\/blog\/why-do-startups-fail\/","title":{"rendered":"Do 90% of Startups Really Have to Fail?"},"content":{"rendered":"

Start-up Success Formula- A Tech-Partner\u2019s Viewpoint<\/strong><\/span><\/em><\/p>\n

It starts with a bright idea, solving some problem, or creating new opportunity, or something novel, that an individual or a team thinks will be a great product or service.<\/p>\n

A majority of startups fail to succeed. Do more than 90% really have to fail? There can be many reasons, but here we will discuss about the reasons connected to Technology, and also how \u2018many more startups\u2019 can be successful!<\/p>\n

Having worked with multiple startups and having built 40+ products across industries and geographies, we have learnt what are the pitfalls, mistakes that can be avoided, increasing the chances of a startup to succeed.<\/strong><\/p>\n

Key Mistakes Startups Make:<\/strong><\/span><\/h2>\n

1. Choosing the Wrong Technology Stack<\/strong><\/span><\/h3>\n

Typically, a startup is in a great hurry, and rightly so! Usually startups think what is the quickest way to come up with a solution, so I can get some market\/ investment traction? Many times the founders are not experienced in selecting right Tech-stack. In our experience we have seen great number of startups starting with fast and cheap development, and then having to restart from scratch.<\/p>\n

2. Incorrect understanding of MVP<\/strong><\/span><\/h3>\n

Minimum Viable Product-And the myths:)\u00a0 Startups think let\u2019s make a quick minimum viable product\/ prototype and get some investment! But what is the minimum viable product? It is not just some working model, but should have a GIST OF WHAT NEW STRONG CONTRIBUTION YOUR ARE BRINGING IN! We call it MVAP. Minimum – Viable \u2013 Attractive<\/strong>(to investors\/ buyers)<\/a>–<\/em>Product<\/em>.<\/strong><\/p>\n

3. Rigidity in Ideas<\/strong><\/span><\/h3>\n

We have been creators and have gone through this. Even to the extent of refusing a buyout option from a big company. Startups often resist feedback\/ corrections\/ new ideas. They think this startup is my baby and how can someone dictate the terms?<\/p>\n

4. Starting with inadequate Budget<\/strong><\/span><\/h3>\n

This stems from not having the long term understanding of the business. Partial product\/ lame MVP, or just planning to develop product and forgetting to plan about marketing (to customer or investor). But what is an inadequate budget? It is a budget that surely will dry out and the startup is bound to get stuck in the mud.<\/p>\n

Many times Investors are the cause of this mistake. Investor is a hard negotiator. Startup asks for 5 million and investor may say 1 million is enough. It is a common thought, that 1 million is a smaller risk than 5 million. But if the success really needs higher investment \u2013 and say 5 million would have a chance of 20% success, doing an inadequate investment would reduce the chance to 2%. Should one invest in 5 ideas with inadequate amount? This is a losing proposition, a sure formula for a startup failure!<\/p>\n

Advice to investors:<\/strong> <\/span>If you think it is right business model, go with ADEQUATE INVESTMENT, but don\u2019t do a partial, half-hearted contribution. This contributes greatly to many start-ups getting choked when they are on threshold of making it bigger.<\/p>\n

5. Many startups build their own IT team<\/strong><\/span><\/h3>\n

Many startups try to build their own IT team thinking that would save their cost, right?<\/p>\n

This is like running 2 companies simultaneously. One their own startup idea(business) and the other an IT company. Yes, they need to do all that an IT company has to do \u2013 manage attrition, development, have HR department, play the role of CTO, keep watch on changing tech scenario and what the competitors are doing.<\/p>\n

Let\u2019s analyze the 2 parts (Startup business and IT company). A startup may have the potential to grow 1000 times. On the other part, managing an IT arm yourself may save only 20-30% at best (provided everything goes perfectly as with great luck you get a competent and loyal <\/strong>team) compared to working with a dedicated product development company.<\/p>\n

So taking your main business to 1000 times, takes a back seat and you spend more time on trying to save some Tech cost!! We have personally known a few startups, who had great potential and have been surviving but not achieving full potential due to this \u2018wrong focus\u2019.<\/p>\n

Disclaimer<\/strong>:<\/span> Not all outsourcing works. It can be a disaster if you do not find a reliable partner with both COMPETENCE AND INTEGRITY.<\/p>\n

The Role of a Tech Partner in Startup Success:<\/strong><\/span><\/h2>\n

For both startups and investors, having the right tech partner is essential. A good tech partner acts as a guide, helping founders make smart choices and use resources effectively.<\/p>\n

Tech-partner can help startups in,<\/p>\n

    \n
  • Strategic Tech Planning:<\/strong> Choosing the right tools to save costs and build scalable products.<\/li>\n
  • Right phasing\/ planning: <\/strong>What should be the MVP, what should be the following phases based on investment available and market scenario.<\/li>\n
  • Problem Solving & Crisis Management: <\/strong>Helping startups adapt to challenges and market feedback for smooth operations.<\/li>\n
  • Transparent Collaboration:<\/strong> Working as a team to build success together.<\/li>\n<\/ul>\n

    Conclusion: <\/strong><\/span><\/h2>\n

    Startups don\u2019t have to fail, but success requires smart planning, flexibility, and collaboration.<\/strong> Whether you\u2019re a founder or an investor, understanding the importance of adequate funding, strategic planning, and the right tech partner can make all the difference!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

    Start-up Success Formula- A Tech-Partner\u2019s Viewpoint It starts with a bright idea, solving some problem, or creating new opportunity, or something novel, that an individual or a team thinks will be a great product or service. A majority of startups fail to succeed. Do more than 90% really have to fail? There can be many […]<\/p>\n","protected":false},"author":3,"featured_media":385,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[127],"tags":[133,134,132,129,128,135],"class_list":["post-366","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-start-up-tech-mentoring","tag-entrepreneurship","tag-minimum-viable-product","tag-product-development","tag-startup-business","tag-startup-tech-mentoring","tag-tech-startup","entry","has-media"],"yoast_head":"\r\nWhy Do Startups Fail? 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