Why Startups Fail - Strategies for Software Companies


Competition amongst companies, especially for startups, is very intense and serious in tech world. There are fears within startups related to the increasing number of startups, which may result similarly to what happened during the dot.com era in 2000.

In the United States alone, around $45 billion was invested in startups in 2014, and that number continues grow.

There are many reasons why startups fail. One of the core reason is the “need in market,” which ends up resulting in companies going haywire. A few more reasons are listed below:

  • Cash flow
  • Team competency
  • Competition
  • Engagement models
  • Poor Marketing strategy
  • Lack of teamwork in all matters
  • Inappropriate location
  • Legal establishment
  • Unable to get investors
  • Financial visibility

The points listed above are hints towards how startups can avoid to fail, especially for software companies, and how they can come up with strategies to help them succeed.

Key Strategies for Success


Automation for startups is a multi-layered strategy, which is not only limited to repetitive processes. In tech startup, scope of automation is applied to every stage strategic area from marketing, to sales, to ERP/CRM, to project management, or to deliverables.

Startups can use tools and softwares that facilitate the end to end process, including marketing intelligence gathering and analysis, software test automation, the automation of actual marketing efforts, and advanced workflow automation.


It is true that all the startups out there want to run their organization very efficiently to be at their best. Efficiency is a crucial factor for any startups or businesses who are aiming high.

Startups can observe efficiency by having clear set of goals with long-term and short-term planning.

There needs to be a clear vision of what needs to be achieved, and what would be next steps for winning. Hiring key people with expertise is key mantra for an startup efficiency. Even some of the most efficient startups fails due to incompetent workers.


“A startup is a company designed to grow fast… The only essential thing is growth. Everything else we associate with startups follows from growth.” - Paul Graham

Startups and small businesses are differentiated by one parameter, the potential for scale and growth. Growth for startups really depends on how growth strategies are defined and implemented. It also equates to how to be dynamic and adaptive towards adapting to changing situations and agile strategies of growth. Startups or businesses that fail to adapt to market movers are unlikely to succeed.

Every startup needs to build an engine that scales rapidly and achieves exponential growth. The engine is really dependent on how other engines run in businesses, such as marketing, sales, etc.

For software startups, scalability is achieved by investing in and using recent technologies, like cloud computing. Cloud resources are preferable as their costs is reasonable and easy to scale.

Again, scalability is a synonym for agile, so it only make sense if startup owners learn how to adapt to change in a continuous manner. It is essential for smart owners of startups to be very watchful of market movers, threats and always look for opportunities to formulate and implement appropriate strategies.


It is not enough to simply have a great product or a great idea for a startup to succeed, but it is also important to integrate concepts that will ensure a sustainable path to growth, and this includes a fair amount of automation in order to boost scalability.

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