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6 Reasons Why Startups Fail and How to Avoid Them

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6 Reasons Why Startups Fail and How to Avoid Them

With so many startups created every year, what separates those that fail and those that succeed? Check out this article for the answer.

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Since March 2017, the Google Play store has published over 2.8 million Android apps for users to choose from. As for the Apple App Store, they have published over 2.2 million apps since that time.

Despite apps being used regularly by mobile users, there are not as many app downloads. As a result, there is a lot of competition to get the attention of app users. App startup entrepreneurs need to do thorough research to give their users some value and solutions to their demands. All this must be done before developing the product if they don’t want to see their startup fail

Users have several apps to choose from, so it is unlikely that they will notice your app. Statistics show that about 35% of all engagements with mobile apps will end within 60 seconds. This proves that users make decisions rather quickly about apps. Because of this, it is a difficult challenge for a developer to create and publish a mobile app that can compete in today’s saturated app marketplace and actually make money.

Benchmarking

The objectives that you have for your business and the type of app you want to create will determine what success means to you. To measure success accurately, it revolves around the following two factors:

- Quantity: How many downloads has your app received? How many of your target users are using your app (percentage wise)? This type of quantitative data will help determine your rate of success.

- App Monetization Objectives: Does your product has an advertisement app monetization model to generate revenue? Perhaps you’re selling your app as a paid download. You may want to offer your app for free to download and then offer users in-app purchases. Figure out your objectives as far as app revenue is concerned.

If you want to have a successful app startup, figure out where your competitors’ apps failed. See which mistakes they made with their apps so that you won’t make them too. To give you assistance with this, below is a list of the 6 main reasons why startups fail.

The Top 6 Reasons Why Startups Fail

The app market certainly has a lot of competition, but it is not all about luck. There may be other reasons that would cause our app to fail. Below are the 6 most likely reasons why startups fail, aside from the competition.

Bad Quality Research of your Target Audience

Just because you have a great app idea, doesn’t always mean it would be a great app. Research should be what determines the app project that you undertake. Does your startup idea have a big market behind it? Will your app be the solution to a big problem that people have? Is there a lot of competition surrounding this app idea? Overall, do you think your app would be something that people would want to download and use? Will their lives become easier from using your app? Is the experience of using your app a unique and interesting one? Do you have enough details about your app idea to make it a reality?

Do not just assume that users will enjoy your app. You need to perform market research to see where the app trends are and what your competition is doing. Most of all, you need to collect information which supports the potential of your app startup idea and the value of the investment that you’re going to make in it.

If you don’t do any research prior to developing your startup app, then you won’t know your target audience and you won’t know which features to create that will be attractive. As a result, you will only build an app that you think people will like, but after the app launch it will turn out that they don’t like it.

It is an iterative process to bring a new app to the market because you need to confirm certain theories pertaining to the app itself and the behavior of the users. Usually, an app product cannot be validated with just a prototype. You need to have an iterative process to always satisfy the demands of your users. This is the only way they will stay engaged. The trick is knowing which type of app to build that will interest these users. You need to create something that will go beyond their expectations and give them a solution to their problems and pains which your competition cannot do as well. Think about building a minimum viable product which has all the features necessary to provide a solution for the primary problem that a group of users is facing.

49% of app startup entrepreneurs indicated that they created apps which only satisfy their own demands and needs. This is why startups fail. These "startupers" made the least amount of money out of all them.

Not Original

There are so many startup apps in the app stores that are either similar or totally the same. There is a strong value proposition with popular apps, such as Airbnb and Uber.

If you conduct competitive research, then you will understand what the strengths and weaknesses of your competition are. This will help you discover the competitive advantage that you have in the market. You certainly won’t attract users if your app provides the same features as other apps on the market. To achieve business success and boost loyalty from users, you need to consider a unique value proposition. This must be one of the biggest reasons why startups fail.

Disregarding Platforms

Many startups don’t take it into account the differences between mobile platforms — it is another reason why startups fail. The iOS and Android platforms operate differently. Their buttons, gestures, and prompts are different on each platform. For instance, there is a back button that comes with all Android hardware. You won’t see a back button on Apple devices. If you don’t create app for each platform to accommodate these unique differences, then it will negatively affect the experience of the users. The right strategy is to a create native iOS or Android app.

If you develop apps which perform poorly on various networks, operating systems, and devices, then it becomes a huge issue. For instance, if your app functions properly on an iPad but not an iPhone, then it will annoy users.

Therefore, the differences between the mobile platforms must be factored into the development of the app. Otherwise, you will just aggravate your end users to the point where they won’t want to use your app. Since most users take less than 60 seconds to decide on an app, you cannot afford to make anything about your startup app frustrating or irritating to them.

Bad User Experience

Developing an app requires the use of many components in order to provide a quality experience to your users. At the very least, you must have an intuitive app. Your users should be able to conduct standard actions and understand how things function in your app without any hassles. Otherwise, it will be a bad experience for them.

Here are some examples of things that ruin the user experience:

  • Taking a long time for features to load

  • Slow app performance

  • Difficulty viewing certain features

  • The registration process taking too long

It is important to focus on the specific platform, iOS or Android, for creating the right user experience and interface for your app. As previously stated, each platform has unique features and they must be considered if you want your users to have a good experience with your app. One example is the size of the controls which you tap. Each platform has their own minimum size requirement for these controls. The same goes for the requirements of swipe gestures too. Users may expect these actions to be similar on each platform. Do your best to make that happen.

Not Testing Properly

The fifth obvious reason why startups fail is lack of testing. According to a Blancco Technology study, 58% of iOS devices have performance failures of some kind. These could be components that fail or apps that crash. Testing needs to be done so that your end users don’t go through this. It has been determined that 44% of all app defects are discovered by the end users. Direct feedback discovers 24% of the defects and user reviews discover 20% of defects.

When an app launches, it is normal for it to have some minor bugs. But you’ll still want to test first to ensure there are no bigger bugs or issues. If you fail to do a good app test first, then your startup app will most likely have lots of bugs that will impact the experience of your users. If the users end up experiencing a crash, they will never want to use your app again. When you look at the reviews for apps in the Apple App Store and Google Play Market, the most negative reviews are due to apps that crash. 

You must have a set documented process to conduct your app tests. This will help you to determine if your app is ready for the market. If you don’t impress users after your first market launch, then you likely won’t be able to get another chance to win them over.

A Failed App Launch

The last of the top reasons why startups fail is a bad app launch. So your market research is finished and your app is created. The next step is to launch your mobile app onto the market. If you want this to be successful, you need to have a marketing plan already prepared. This helps you make sure that each step has been executed within a reasonable amount of time.

Quettra conducted a survey which revealed that 77% of people who use mobile devices every day will only use an app for up to 3 days. To retain many users and achieve a high download rate, your app must give users a great first impression right away. These first few days are the most important because they are when users will determine if your app gives them any value or not. If users don’t see the value within these days, they will lose interest in it.

When you launch your app, it is not the last time you will ever work on it. Mobile apps can always be improved or enhanced while they’re on the market. As the demands of the market change, you should reassess your app and see how you can update it to conform to these market changes. Frequent relaunches and updates will increase user engagement and interest in your app.

Conclusion

Now you know the main reasons why startups fail. On top of that, there are numerous factors that determine your app performance, such as your marketing budget and your level of competition. Aside from them, your app may still fail if you don’t research or execute properly. Keep your mind on audience research, market research, and allow your app’s design to accommodate different platforms. Most of all, conduct quality assurance testing on your app before you launch it. This could be the deciding factor of whether your app succeeds or not.

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Topics:
startup business ,app failures ,startup marketing ,startup mistakes ,agile

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