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As per data provided by the US Small Business Administration, half the startups that began in 2011 have already died down while about twenty percent of those founded in 2014 did not even complete a year. A lot of MBA students wrongly assume that disruptive technology is the only way forward for a startup to thrive. There are several reasons why a startup may not survive. The most common factor as provided post business analytics done by CB Insights is that they do not serve any existing market need. Another major reason is the fact that they quickly run out of funds. Their cash flow models are not efficiently run, and not every startup gets a handsome seed fund to begin with. The inability to assemble together a proper team is the third common reason for failure cited. Another is excessive competition. When one startup does well in any field, or any idea catches up, several others try to pounce in, often with limited results. Finally, it has been observed that startups wind up due to pricing issues. This is different from funding as a lot of new business entrants keep entry prices lower than market rate to attract projects. These get unsustainable in the long run.

Source:https://www.forbes.com/sites/sageworks/2017/05/14/why-startups-fail-and-how-to-avoid-failure/#2964ae19a3b9

Uploaded Date: 20th May 2017

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