6 Reasons Why the Majority of Startups Fail

6 Reasons Why the Majority of Startups Fail

Startup companies are the pioneers of change, as they are responsible for creating new markets and improving old ones while earning a profit. But the success of startups is not something that comes quickly. It requires hard work and dedication. We always hear about the success stories, but it is important to know that about ninety percent of startups fail.

Several factors contribute to a startup’s chances of success or failure. Here are some of the most common reasons for startup failure.


1. Not Getting the Best Team Together

One of the biggest challenges that startups have to face is putting together a balanced, strong team. Startups need to have diversity within their teams, but while achieving diversity, they often end up assembling a group that fails to work together. The success of a new business depends on having a dedicated workforce with a variety of skill sets. The people you hire should be able to share each other’s strengths while compensating for each other’s weaknesses. Choosing the best people when hiring the first few employees is a challenge that can make or break a startup.

2. Failing to Study the Market

Startups are built on ideas, but it is important to ensure that the core ideas and concepts are achievable and practical. Many startups fail because they try to build a business around just a concept. But consumers are not going to pay for just an idea. They want complete products that are functional and that solve a problem they have. Failing to do a thorough analysis of the market also leads many startups to invest time and money in developing a concept that is not a good fit for the market. Ignoring the realities of what customers want leads to failure, so it is important to analyze the market while implementing the idea of a startup if you want it to succeed.


3. Creating Poor Marketing Strategies

Startups often fail to give marketing its due attention. Marketing is critical to the success of the business, so it is important to come up with useful and efficient marketing strategies. Businesses are only successful if they manage to attract customers, so it is essential to actively reach out to consumers through marketing. If you are selling energy-efficient refrigerators, then you can attract customers by sharing refrigeration guides that educate people about most energy-efficient appliances. There are so many offline and online marketing channels that you can use to promote your business.

4. Running out of Money

Money is also one of the primary reason for startup failure. New companies fail because they often do not take all of the required costs into account when they calculate the financial needs of their business. They come up with a starting cost and think that will be sufficient for running an established business. To plan ahead for your business, you need to think not just about start-up costs, but also about all the daily costs of running the business. You have to think about salaries, recruitment and other expenses. Plan ahead to make sure your business stays afloat, whether it is earning any profit in the first year or not. Getting a loan that will need to be paid back in the first few years of operation is also a bad idea. Most companies fail to earn big profits in the first few years, so make sure you have your financial costs covered if you want your startup to succeed.


5. Not Investing in Security

Investing in business security is important, but most startups ignore it. The risk of failure is reduced if the business is secure. There are three types of business security you will need to consider: legal, insurance, and burglary/cybercrime. You should secure the physical premises from which you are working so that you can keep the startup’s property and equipment safe. You should also invest in cybersecurity for your business.

Insurance and legal protection are essential to minimize the risk factor in your business. Without adequate protection, your startup may fail to survive any setback it encounters.


6. Losing Perspective

Startups can also fail because entrepreneurs are often so taken by their vision that they lose perspective. It is important to pay attention to trends in the market and to try to mold your image accordingly, because failing to adapt leads to many business failures. You should try to obtain investments from venture capital firms or angel investors who are familiar with your target market. That way, they can give you useful feedback and help you come up with better strategies.

It is important to spend some time understanding the reasons behind the failure of so many startups so that you can minimize the risk of failure for your own.

Featured photo credit: Bilan via

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Yasmin Rasidi

Copy Writer at Swotfish

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Published on March 26, 2019

How to Write a Cover Letter for a Career Change (Step-By-Step Guide)

How to Write a Cover Letter for a Career Change (Step-By-Step Guide)

Embarking on a career change, tiny or big, can be paralyzing. Regardless of the reason for your desired career change, you need to be very clear on ‘why’ you are making a change. This is essential because you need to have clarity and be confident in your career direction in order to convince employers why you are best suited for the new role or industry.

A well crafted career change cover letter can set the tone and highlight your professional aspirations by showcasing your personal story.

1. Know Your ‘Why’

Career changes can feel daunting, but it doesn’t have to be. You can take control and change careers successfully by doing research and making informed decisions.

Getting to know people, jobs, and industries through informational interviews is one of the best ways to do this.[1] Investing time to gather information from multiple sources will alleviate some fears for you to actually take action and make a change.

Here are some questions to help you refine your ‘why’, seek clarity, and better explain your career change:


  • What makes me content?
  • How do I want work to impact my life?
  • What’s most important to me right now?
  • How committed am I to make a career change?
  • What do I need more of to feel satisfied at work?
  • What do I like to do so much that I lose track of time?
  • How can I start to explore my career change options?
  • What do I dislike about my current role or work environment?

2. Introduction: Why Are You Writing This Cover Letter?

Make this section concise. Cite the role that you are applying for and include other relevant information such as the posting number, where you saw the posting, the company name, and who referred you to the role, if applicable.


I am applying for the role of Client Engagement Manager posted on . Please find attached relevant career experiences on my resume.

3. Convince the Employer: Why Are You the Best Candidate for the Role?

Persuade the employer that you are the best person for the role. Use this section to show that you: have read the job posting, understand how your skills contribute to the needs of the company, and can address the challenges of the company.

Tell your personal story and make it easy for hiring managers to understand the logic behind your career change. Clearly explaining the reason for your career change will show how thoughtful and informed your decision-making process is of your own transition.

Be Honest

Explain why you are making a career change. This is where you will spend the bulk of your time crafting a clear message.


Speak to the mismatch that may be perceived by hiring managers, between the experience shown on your resume and the job posting, to show why your unique strengths make you more qualified than other candidates.

Address any career gaps on our resume. What did you do or learn during those periods that would be an asset to the role and company?


I have been a high school English and Drama educator for over 7 years. In efforts to develop my career in a new direction, I have invested more time outside the classroom to increase community engagement by building a strong network of relationships to support school programs. This includes managing multiple stakeholder interests including local businesses, vendors, students, parents, colleagues, the Board, and the school administration.

Highlight Relevant Accomplishment

Instead of repeating what’s on your resume, let your personality shine. What makes you unique? What are your strengths and personal characteristics that make you suited for the job?


As a joyful theater production manager, I am known to be an incredible collaborator. My work with theater companies have taught me the ability to work with diverse groups of people. The theater environment calls for everyone involved to cooperate and ensure a successful production. This means I often need to creatively and quickly think on my feet, and use a bit of humour to move things forward to meet tight timelines.


Feature Your Transferable Skills

Tap into your self-awareness to capture your current skills.[2]

Be specific and show how your existing skills are relevant to the new role. Review the job posting and use industry specific language so that the hiring manager can easily make the connection between your skills and the skills that they need.


As the first point of contact for students, parents, and many community stakeholders, I am able to quickly resolve problems in a timely and diplomatic manner. My problem solving aptitude and strong negotiation skills will be effective to address customer issues effectively. This combined with my planning, organization, communication, and multitasking skills makes me uniquely qualified for the role of Client Engagement Manager to ensure that customers maintain a positive view of .

4. Final Pitch and Call-To-Action: Why Do You Want to Work for This Company?

Here’s your last chance to show what you have to offer! Why does this opportunity and company excite you? Show what value you’ll add to the company.

Remember to include a call-to-action since the whole point of this letter is to get you an interview!



_________ is a global leader in providing management solutions to diverse clients. I look forward to an opportunity to discuss how my skills and successful experience managing multiple stakeholders can help build and retain strong customer relationships as the Client Engagement Manager.

Summing It Up

Remember these core cover letter tips to help you effectively showcase your personal brand:

  • Keep your writing clear and concise. You have one page to express yourself so make every word count.
  • Do your research to determine ‘who’ will be reading your letter. Understanding your audience will help you better persuade them that you are best suited for the role.
  • Tailor your cover for each job posting by including the hiring manager’s name, and the company name and address. Make it easy on yourself and create your own cover letter template. Highlight or alter the font color of all the spots that need to be changed so that you can easily tailor it for the next job application.
  • Get someone else to review your cover letter. At a minimum, have someone proofread it for grammar and spelling errors. Ideally, have someone who is well informed about the industry or with hiring experience to provide you with insights so that you can fine-tune your career change cover letter.

Check out these Killer Cover Letter Samples that got folks interviews!

It is very important that you clarify why you are changing careers. Your career exploration can take many forms so setting the foundation by knowing ‘why’ not only helps you develop a well thought out career change cover letter, [3] but can also help you create an elevator pitch, build relationships, tweak your LinkedIn profile and during interviews.

Remember to focus on your transferable skills and use your collective work experience to show how your accomplishments are relevant to the new role. Use the cover letter to align your abilities with the needs of the employer as your resume will likely not provide the essential context of your career change.

Ensure that your final pitch is concise and that your call-to action is strong. Don’t be afraid to ask for an interview or to meet the hiring manager in-person!

More Resources About Career Change

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