Why do so many startups go bust, despite having an excellent product that can significantly improve life for their prospects? The answer could be marketing-related.
In his book The Lean Startup, Eric Ries defines a startup as “a human institution designed to create a new product or service under conditions of extreme uncertainty.” A Forbes article goes on to explain that startups often get their disruptor status from their focus on either improving shortcomings in existing products or creating completely new categories of goods and services—and therefore have the potential to significantly and sometimes radically change consumer behavior in an industry.
For those familiar with Ansoff’s Matrix, startups typically find themselves in the diversification quadrant, seeking to create a new product in a new market—a strategy that comes with the highest risk but also with the highest rewards. In fact, the rewards of success are so significant that the flow of new startups shows no signs of abating anytime soon. According to audit, tax and consulting firm RSM UK Group, the total number of new tech companies incorporated in the U.K. increased by 22% between 2022 and 2023.
And yet, several studies continue to show that approximately 90% of all startups fail. Reasons given vary, but the most prevalent appear to simply be...
The full article was originally published on Forbes and can be read here.
Comments