In 9 Years of Learning, I Saw 500+ Products Failing: Top Reasons Why Startups Fail


reasons why startups fail

According to the Startup Genome Project, up to 70% of startups scale up too early. And it’s quite interesting that most of these entrepreneurs think that they’re building the next big thing. It’s true, to some extent. But in reality, over 90% of them fail. And why startups fail?

Hello, I’m Mayank! I’m a co-founder of EngineerBabu, a tech startup for building app and web products for small startups to even big enterprises. I started this company from Bangalore but soon realized that “I’m not gonna become on of these guys and waste my life in Traffic Jams”. Hence, I moved to Indore, the cleanest city of India that has an IIT, IIM and NIT nearby.

Let’s talk about the various things about my business that excite me. Although, not all of them are business-oriented. But I’m pretty sure you’ll get to learn something or the other by the time you finish reading. I’ll also be sharing my experience about the reasons why startups fail.

To begin with… I call myself an idea guy!

I am always eager and passionate about working on new ideas. Whenever I come across any business venture of friends or acquaintances- from yoga, hospital to even street food- my brain starts imagining the ways it can grow. For example, let me tell you about 2 interesting stories.

The Panipuri Stall

Near my office, there’s one street food vendor with his panipuri stall. Back in the days, I used to ask him: “Bhaiya, where do you live, at would time do you set the stall up, how much does every arrangement cost, how much do you make, etc..“.

After listening to him, I advised him to change the location of his stall during the day time. There’s a big Cafeteria near the business centre and most of the employees from these offices have their lunchtime between 1-3 pm. I suggested him to move the location just 500 meters to the other side. This way, he would definitely get access to 4000+ employees. I am sure his revenue could easily be doubled! πŸ™‚

The Yoga Story

I do Yoga daily. My trainer used to keep asking me “Mayank Ji, let’s make a website or an app so that we can do this and that for growth….“. I advised him the opposite of what he wanted:

Most of your customers are in Indore, and you have earned their loyalty. Because these customers have been coming to you for many years, they don’t need an app. And even you don’t want to go to a different city. So just take a Justdial premium plan and ask people to leave a review there. This would be sufficient for you to grow your business.

They have grown from having just one Yoga centre to 9 Yoga centres. And that too in just 2 years! πŸ™‚


I find passion in working with founders, consulting them in tech and marketing and helping them grow their business in an organic way. Every day, EngineerBabu usually gets 27 – 50 inbound sales inquiries from across the world. Each of the clients has a great idea and they’re eager to sign NDA and begin working with us for the development of their app or web product.

We are only able to take very few projects: 7-10 in a month. Thus, 90% of inquiries are rejected either due to budget restraints, unclarity about what the customer wants, and many other reasons. But the catch is, these few projects that we shortlist, we know for a fact that these founders are passionate. Not only are their ideas good, but they can also add a nice case study in our portfolio. We try our best to make sure they get the best of the latest tech and their product looks beautiful.

Yet, 90% of them close their shops after having the product delivered. Why do startups fail? Let’s see what I’ve gathered about this from my experiences-

The Top 10 Reasons Why Startups Fail:

1. Leaving a high paying job and becoming cashout
2. Trying to do too much in MVP
3. Not having enough Marketing Budget
4. Focusing too much on growing the user base rather than profits
5. Not having enough patience
6. Not taking expert advice
7. Hiring unreliable freelancers or building with a cheaper technology
8. Not knowing how to market products and reaching out to investors
9. Not having the right team
10. Being too professional


Leaving high paying jobs and becoming cashout-

I was working with one customer David from Berlin. He had a very cool idea. When he approached us, he had already left his job with Facebook! Not only did he get to build a nice app, but was also able to acquire 300+ customers. Although, he soon ran out of money. He had to take up a job again. This time, the new boss asked him to leave his idea to devote 100% energy towards the boss’s startup.

If you are working somewhere, and 3-4 friends have an idea, each of them will be contributing some money. You can easily divide your responsibilities as well as time. It will make sure that you’re able to manage your full-time job until the startup idea is successful and makes you financially stable.

Products need time and consistency is the key. 90% of the planning procedure comprises of guesses. You have to have patience and money to bring things on track every single time. What if you hire the wrong designer, writer or developer during your initial lookout for a team? Will you drop the idea or look for another one and start again

Trying to do too much in MVP:

I have seen many founders starting with one idea and then going on to add a list of features. When they launch the product in the market, it usually confuses new customers about how to use it.

Our team uses the application Basecamp. It is the number 1 Project Management tool and has been growing 100% with every coming year for the last 13 years. Whatsapp is a simple app. There have been many people who have tried to compete with WhatsApp. However, they waste a lot of money while marketing with top celebrities.

Keep your focus on solving one problem, the one you can do the best. Customers don’t care who your father is. All they care about is, “Is this something worth utility or just for keeping in the phone?


What are your views on the reasons why startups fail? Let us know in the comments. You can also contact me directly via [email protected].

To know more about us, check out our detailed portfolio. If you have any great ideas, let’s discuss them and seek any opportunities there are, for mutual growth. πŸ™‚

Recommended reading:

  1. How Earning Apps Like Meesho Can Help You Make Money Online!
  2. How To Make An eLearning Mobile App Like Khan Academy (Or Udemy)
  3. Setting Up An Offshore Development Center In India

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