Why startups fail on marketing ! ( What should they do instead )

Why startups fail

Why startups fail on marketing ! ( What should they do instead )

Startup! That’s the buzz word of the decade. Did you ever wonder Why Startups Fail?

Startups’ failing is the fate of every 9 out of 10 startups!

To look at from the outside, starting and building a business may look easy and simple. But the truth is most new businesses fail before they even soar high. Starting up is laborious work. And what makes it more dreadful is the fact that statistics prove that 90% of startups fail, within 36 months of their existence. People learn from their mistakes. But a good entrepreneur is one who can learn from the mistakes of others and avoid their startups failing! Let’s browse through a few pointers on reasons why startups fail and what could be done instead!

Why Startups Fail?

Business factors

Let’s have a quick look at major startups problems

Product Market Fit

Businesses are driven by the market. Business opportunities come up to provide solutions to market problems. But if your startup is addressing insignificant or non-existing problems, it is sure to fail!

Solution: An in-depth research and market survey would be able to give you the pulse and viability of your ‘idea’!

Business Model Botch

The business model is the carcass of every business. Startups sometimes get so obsessed with solutions, that they overlook the business model. They miss considering vitals like the cost to acquire customers, lifetime value of customers, etc.

Solution: A business needs to clearly analyze the scalability of its customer acquisition strategy.

Poor Management Team

Management is to the company what the heart and brain are to a human. Poor management can be disastrous!

Solution: Ensure to have a strong management team that takes decisions backed by data.

Lack of talent & competency

Surprisingly 23% of startups fail due to dearth of talent and skill. Either they hire without in-depth thought or they cannot afford experienced personnel employees who come at a high price.

Solution: Plan the hiring process well, make it stricter and intense. Consider alternative options like freelancers and project-based employment.

Cash Crunch

Cash flow to business is like blood flow within the body. An overall great company with crunching cash flows would mean the company won’t be able to pay its bills and its employees.

Solution: Keeping a good eye open on accounts should never be ignored.

Failure to Execute Marketing

At times businesses assume a good product/ service is bound to draw customers itself. And they end up ignoring to pay much attention to marketing.

Solution: Only a clearly defined marketing strategy can help your startup boat sail. You need to clearly define and work on your content marketing tactics. If the target audience doesn’t know of your existence, there would be no sales! The best way to do this well is to tie up with a specialized content marketing agency.

Substandard Product Experience

If the experience your products give to your customers is falling short from the competitor’s product experience, customers won’t blink an eye to switch.

Solution: Cost savings are good, but not at the expense of quality.

Low Marketing

Noise matters! Even the best of the best product can fail to take off if people are not aware of its existence! The same holds good for poorly managed marketing. 

Solution: Begin marketing earlier than the product launch. Spread the word! Tying up with a reputed content marketing agency would ensure your startup doesn’t fail you on this aspect.

Wrong timing

The timing of your product is off. If your offering is either too early or too late in the timeline, your product is sure to fail. (Launching Netflix in the 1990’s!)

Solution: You must question yourself with common sense and competitors’ benchmark.

Lose Focus

Losing focus, expanding too much too quickly, makes you lose focus.

Solution: Keep focus and don’t get carried away.

Conflicting Management Team

Conflicts in the core management team are a one-way single road to failure of startups.

Solution: Ensure documents like founders agreement, a shareholder agreement is available and capable to deal with the matters professionally.

Lack of agility

The world is always turning! And startups must remain adaptive and agile.

Solution: Ensure agility, continuous learning, flexibility to adapt to change.

Legal Challenges

Legal challenges could ruin your startup.

Solution: Following the law and consulting with an experienced lawyer can save such situations.

Bad Debts

Most of the startups work on credit.

Solution: Consider the reputation of the client before issuing credit.

Funding Sources For Start-ups

Investor Funding


Self-funding is also known as bootstrapping. It means you raise funds from your own savings. First-time entrepreneurs often face trouble getting funding. The major advantage of such type of funding is that you need not waste time on finding investors and the whole process is easy, quick and possible with fewer formalities/compliances. Borrowing funds from friends and family is also a very good option. Your inner circle trusts you the most, and thus makes the process quicker, and easier!

Angel investors

Angel investors are personalities with surplus cash and a keen desire to invest in promising startups. They might work individually or in groups. Angel investors are the best choice if you are looking for $25,000 to $250,000. Many times, such angel investors also prove to be a storehouse of advice and mentoring.

Venture capital

Venture capitals are professionally managed funds. They invest in companies they see a huge potential after careful research on startup ideas of many people. They typically invest in business against equity and take the road out when IPO or acquisition steps in. VC’s possess good expertise and can be great mentors. They keep a keen eye on the business operations and evaluate the business for sustainability and scalability. It is advised a startup doesn’t tap this option in its initial stages unless the requirement is more than $1 million. Also, VC’s look to recover their investment within a 3-5 year time window. 

Incubators and Accelerators

Accelerators and Incubators are a good option for early-stage businesses. Incubators nurture a business like a parent nurtures a little child. They provide shelter tools, training, and network. Accelerators are similar; the primary difference between both being incubators nurture, accelerators help to run/take a giant leap in the business. Both do this in exchange for equity in the startup. 


This is the latest funding means on the block. In simple words, it is like taking a loan from more than 2-3 people at a time. Such funding is possible through online crowdfunding platforms where the loan seeking entrepreneur puts up an in-depth portrayal of his business idea. If an investor likes the idea after he conducts research on startups ideas, he decides to fund a part or whole of it, in exchange for a pre-decided payback. Crowdfunding also proves to be a good marketing tool. But crowdfunding is a very competitive option and to gain attention amongst the crowd, your business needs to be rock solid.

Where Startups Should And Should Not Spend

Running a startup isn’t easy, especially because the rate of failure of startups is so high. Data proves that the prime reason contributing to the failure of startups is their bankruptcy. This could happen because of high spending on insignificant things. It is vital to understand the difference between unimportant and vital expenses. Neither being a scrooge always, nor spending over than required is apt. It’s essential that you recognize the difference. It is a tight rope walk and needs the utmost care to be done well. Below is a glimpse of some essential expenses-

  • The business plan
  • Market research on product acceptability and demand
  • A CFO or accountant
  • Networking
  • Legal advice and paperwork
  • Hiring tax professionals rather than doing it yourself
  • Investing in customer service 
  • Disbursements on marketing and branding with targeted and quantifiable campaigns
  • Technical support 

Now that we have understood the vital expenses, let us flick through the expenses to avoid-

  • Expensive subscription-based services. 
  • Don’t spend time on activities that others can handle, outsource PR 
  • A fancy office
  • Expensive equipment 
  • Staffing too early 
  • If you cannot measure the results of your efforts, don’t spend the money- be it marketing or PR 
  • Buying followers. They would just cost the company and never convert to revenue 
  • Expensive shipping or printing costs 
  • Spending money before ensuring you’ll make money

Reasons Why Startups Fail at Content Marketing

Even the best of the best startup business ideas can fail without the support of a lot of other parameters, one vital among them being the right content marketing strategy.

An established company is likely to spend around 10% of their budget on marketing. But a startup cannot afford to have such a low budget. For them to be able to demonstrate their viability, they must realize rapid growth. When they fail to achieve this, it hiatuses investors to come in, resulting in a cash crunch in the company, although they have reasonable demand for their product/ service.

To dodge such startups problems it is often seen that startups spend almost 50% of their budget on marketing and sales. The initial phase is the riskiest phase for them, and spending more on marketing would give them leverage to tide over the risks. The initial 12 months are the most vital as their survival depends on the sales of these 12 months.

Marketing today is mostly ‘digital’. The reachability of traditional media, such as TV, radio, and newspapers has dropped, making online mediums more popular, more so amongst young people and residents of developing countries.

The following is a glimpse of common content marketing mistakes made by startups and how they can be avoided-

Clarity of message

A lot of times it may happen that an advertisement of the company isn’t clear enough to make an average person understand what exactly the company does. In an online medium, things get a bit more difficult as the company has less time to be able to explain itself. A startup should begin by figuring out keywords they wish the probable customers should associate their company with. It should be a short and clear description. Such keywords should be incorporated in all possible content, marketing mediums, metadata, and captions. This would ensure your product or service is well understood by probable customers.

Target audience

Every product or service has a set target audience. The startup must keep that in focus while embarking on their digital marketing journey. Today with content marketing it is very easy to be able to target a specific audience depending on their age, location, gender, likes and dislikes, browsing pattern and history, etc. So startups can take lead from such data and then target the probable customers. For example, you are a startup dealing with shaving equipment for men. If your marketing strategy is to target anyone online and not just men above 15 years, you are making a mistake and need a better content marketing strategy.

Broadcasting instead of engaging

Content marketing can be effectively used as a tool to engage customers, gather the market pulse by striking conversation with them, and also seek feedback on ways the customer can suggest the startup can evolve and improve. This serves two benefits. One, the customers feel involved with the brand, and two, you get valuable advice for free.

Being self-obsessed

A common mistake a startup does is being one-sided and never leaving an opportunity to exhibit information on themselves- their products/ services. A good way to use content marketing would be talking about general things and subjects that may be of interest to the target audience at large, showing distinct perspectives and valuable insights and other such efforts to generate a genuine interest of their target audience. It is not always important to have your startup logo, product, and benefits clearly and loudly visible. The aim should be to establish the reputation of your startup. 

Multiple digital channels

It is in the best interest to register and reserve your brand name on all possible social media channels, (to prevent any future issues or use of the name by unauthorized people) but you don’t need to use all of them always. Being present everywhere and always can get annoying for prospective customers. You could strategize, like if your startup is about products/services that would benefit by having a visual appeal – then Instagram would prove useful. If your startup is about products/services that would benefit by talking to customers continuously, then twitter seems a more beneficial option. Facebook works for any kind of business. But the discretion of being able to understand to use which social platform is vital!

Not measuring success

A good content marketing strategy does not ensure huge overnight success. Consistent effort is the key in the game of successful marketing outcomes. But this doesn’t mean you should not keep a tab on the regular impacts of your content marketing campaign. Data on the effects of different content marketing strategies is like a guiding lamp for your future strategies that help you understand what works and what doesn’t!

Quick expansions

Entrepreneurs know the significance of starting lean. But they sometimes lose this key lesson when it comes to marketing. Marketing includes a lot of things- search engine optimization (SEO), content production, pay per click (PPC) advertising, media relations, influencer engagement, and social media management. And it’s not possible a single person can handle all of these. This would tempt startups to expand their content marketing team. But the ideal thing to do would begin with low-cost options possible like using external agencies and freelancers and not hiring employees on your payroll who may become your liability.

Startups Fail; How Can Yours Succeed?

Once you have understood in-depth about the reasons why startups fail, you know what you should not be doing! With these feeds in mind, and a good business plan, coupled with the best content marketing strategies you can surely keep the flag of your startup flying high and far away from a lot of start-ups problems.

Why Every Startup Should Have A Content Marketing Plan and Strategy

Content Marketing

A lot of things go behind planning for marketing your startup. Having a well-defined content marketing strategy plays an essential role, especially due to their short marketing budgets. Content marketing is a reasonably priced and effective means of marketing. A well-organized strategy with in-depth research and a dash of creativity would ensure you a wide customer base with a meager investment.

What Is Content Marketing?

In simple words, content marketing is the content your company posts online with the prime purpose to connect and please the target audience. Some forms of such online content include blogs, press releases, social media posts, white papers, newsletters, emails, videos, and images, etc. With fierce competition in the online world, a good content marketing strategy is a perfect way to gain the attention of the target audience. For a successful content marketing campaign, do ensure you consider the following factors-

  • The content you put up online should be capable of letting the target audience know the distinctness of your startup from the competitors. 
  • Your content should be able to add value to your target audience. 
  • Startups are newbies in the market. They need to create a place for themselves. Engaging content can let the world know a lot about your company, its culture, beliefs, and uniqueness in the capability to offer products for the needs of clients.
  • Startups have low budgets. They cannot afford traditional and expensive advertising means like TV or newspapers. With digital media, the content posted online not only lives forever but also has a wider reach to the ‘millennial’ generation in a cost-effective way.
  • Online marketing has a wider reach. You can expose your company to not only people around the nation but also around the globe.

How To Go About While Creating Your Startup Marketing Plan?

Yes, content marketing is effective, but it has a lot of methods available to choose from. You would need to choose which one or two of them you would like to participate in. The tips below would work as pointers in guiding you to create the marketing strategy for your startup.

  • Have a clear understanding of who exactly your primary and secondary audience is. With this clear in mind, it gets easier to create your content in a way that is most effective among this group.
  • Figure out the frequented online avenues of this target group. Be it the kind of social platforms, the kind of content they browse, or the kind of devices they use.
  • Have a well-defined startup content marketing action plan. Have clear answers to pointers like your –
    1. Goals
    2. Theme
    3. Success measurement barometer
    4. How much would you rely on social media? 
    5. How would you ensure that your content is apt to share?
    6. Would you indulge in guest posting or stick to your own blogs?
    7. A monthly newsletter or periodic email- what’s your style?
    8. What methods of testing the content would churn out?
  • Have detailed timelines for content marketing frequencies.
  • Effective content marketing is supremely important, but don’t miss out on optimization. Current keywords and online industry trends should not be forgotten.
  • Making the content visually appealing by text spacing, bite-sized data chunks, clear text fonts, and colors, soothing and appealing to the eye, relevant and clear images, fun-informative and creative videos.

Partner With A Content Marketing Professional

Partnering with content marketing professionals proves to be very beneficial for startups. Such specialists help you identify your target audience, understand the online behaviors and know where and how to insert links about your content on other relevant websites. This way you can draw more traffic towards your content than you could have done if you had chosen to do it alone. They have expertise in understanding startup problems and can effectively guide your startup to not get held in any of such issues. With their in-depth research on startups of different verticals across industries, they are the perfect people to hold your hand and save you from falling. 

My Two Cents

9/10 starts-ups fail. This is a hard and bleak truth. But this is a lot of food for thought for all the budding ‘startup’ passionate entrepreneurs. Such cold statistics are not meant to discourage entrepreneurs. The reason for reinstating this fact is actually just the opposite- to encourage the budding ‘startup’ passionate entrepreneurs to work smarter and harder. It works as a dose of reality!

Partner with Towards 90  to frame the perfect content marketing strategy for your startup. We offer you solutions for all kinds of marketing needs!

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