Top 5 Reasons Why Startups Fail – Visiting Startups Graveyard

Startup Valley of Death

“Fail Fast, Fail Often” is the most professed maxim in the modern world of innovation and entrepreneurship. The term, originated from 2013 Ryan Babineaux’s book describes how experimenting with a certain market may propose a positive outcome from failing fast and often so that entrepreneurs can gain some valuable insights to return ‘better’ and ‘stronger’.

However, to some experts, the idea indeed is no more than just a hype. Instead of failing fast and often, entrepreneurs should “try, learn and refine” because business is never “about failing fast or slow, it’s about learning how to win.” In the challenging world of entrepreneurship, some may rise like champs when others could get easily knocked down by the harsh reality.

Following CBInsights list of 20 reasons why startups fail, among the top 5 reasons are the lack of marketability, depletion of resources, poor team management, failed business model and lastly, poor product market fit.


Why Startups Fail ?

With the aforementioned factors, we explore some cases of now defunct startups from APAC region in learning why and how these ventures have failed to roll with the punches. What can we learn from their downfall? Here are the top 5 reasons.

*Some sources appeared first on Vulcan PostTech in Asia, Inc42 and Techcrunch.

How to Save Your Business

1. The Lack of Marketability 


What: An incentive based advertising platform from Malaysia that pay users to watch video-ads.

Why: The market for video-ads is too niche in Malaysia, and the truth is, people don’t watch video-ads that much.



What:  An IoT startup from India that builds internet electrical switches and wall plugs embedded with sensors to detect ambient conditions in a room.

Why: No target-market. Lumos tried to pitch the idea of power savings and luxury altogether and it appeared very complicated to consumers.

2. Depletion of Resources


What: An on demand car-wash service provider from China.

Why: They had to compete with several other car-washing services, with a much more cheaper promotions beyond the already cheap price they are offering.



What: A first app-based food delivery service from India that attracted funding from high-profile investors.

Why: They can’t keep up with the rapid growth rate of the food-tech industry and spent too much on customers acquisition while neglecting product segmentation.



What:  A startup that builds and supply low-cost Buccaneer 3D printer from Singapore.

Why: Apparently, Pirate3D “spent too much on R&D” and used more resources than they have. Subsequently, their failure in delivering final products to backers rubbed some salt to the wound.


3. Poor Team Management


What: An e-commerce platform from Indonesia.

Why: The change in management did not work out well for them after they sold their majority stake to their angel investors. Apparently, the investors have even less experience than Alikolo’s founder.



What: An Indonesian restaurant booking/review site operating in Indonesia and Singapore.

Why: After some funding fumbles, AbraResto’s team was upset about the site’s closure, which hadn’t been communicated transparently.


4. Failed Business Model


What: A site for tour packages to Indonesian destinations.

Why: Instead of building a sustainable business model around the product and services, they focused too much on growth.



What: An e-commerce site for baby products from Vietnam that caused pessimism since it’s establishment.

Why: A startup with a weak financial foundation operating in a highly competitive industry and lack of experience in e-commerce may be the major cause of their failure. Additionally, Tech in Asia reported that “they were not prepared to scale.”


5. Poor Product Market Fit


What: A browser-based gaming site from Singapore that had been around since ’08.

Why: The mistake was the company relied too much on “feature phones for monetization” and inability to adapt the rise of smartphone gaming.



What: Delhi’s online recruitment platform for employers to scout competent talent.

Why: They failed to come out with a suitable product fit for the market.



What: A meet-up messaging app from Singapore that attempt to solve difficulty of a large-group WhatsApp conversation in setting up a get together.

Why: Not building something people need and not solving any significant issue. While people may complain about the difficulties in scheduling a meet-up, most don’t think its necessary to use an app for it.


How to Recover From a Failed Startup?

Rocky Balboa Rebound

What can we learn from the post-mortem above? First of all, it is fundamental to view failure as a learning curve because not every success is final, and not every failure is fatal. In the recent Medium post, Jason Goldberg wrote about getting up again after he has lost that worth US$300 million in funding. His advise to those who are on the rebound is “to hone in on something they are really good at and get back to basics of doing it while being aware of their mistakes to avoid repeating them in the near future.”

On top of that, when starting over, startups should get familiar with ways to avoid the Startup Valley of Death. While focusing on products development and market placement,  they can use a certain amount of minimum resources to run a market survey or product testing to get some useful lead in preparing the right business model.

Conclusively, with a better understanding of the market, competition, pricing, and marketing channels, startups will have a fine-tuned business model in order to scale sustainably. After all, with a minimum amount of R&D capital, they can always walk away with a minimum damage if things didn’t go right.

P.S.  Incase you need help in terms of lead generations, data mining, data maintenance and customer support, don’t hesitate to ask us, Supahands, for help.

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