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Reasons Startup Fails After Their First Growth Spurt

As you grow,the owner might be very excited to begin scaling your startups, but the roadahead will definitely have bumps, and speed breakers if not noticed early couldcertainly lead to failures. Make sure you avoid the following speed breakers,unlike other startup companies which are growing rapidly.

Experiencing/Enjoyinga major spurt in your business for the first time?

If this isthe case then the chances are that you will be committing some mistakes alongthe way, though some are natural mistakes that are considered to be a part ofthe growth, the remaining mistakes should be avoided at all costs.

Growing froma start-up or a mid-market company into a scale-up is a process that is filledwith a lot of challenges, even an experienced CEO  or an executive will admit that there area  lot of challenges that are inevitablein a process of scaling business, however, the faster you overcome the hurdleshigher the chances of your business survival.

One of thebiggest challenges you experience in the process of scaling up is that you donot know what's coming ahead but luckily for you, you can learn from themistakes that others have already made, which can be considered a brownie pointfor you as you will be able to take suggestions and do’s and don't list fromthem.

One of theways to overcome the above-mentioned challenges is taking the help of companiesthat provide Startup funding services. One of the rising companies providingthe startup funding services is 'Factsheet '

At factsheet,they provide startup funding services that are proved to be very efficient andeffective as they have a team of highly experienced experts that cover all theaspects like financial planning & analysis, and fundamental and marketresearch. Hiring the services of this company can be the first step toward yourladder of success.

One of themajor reasons the CEOs and executives of startups companies struggle and failto succeed is that they try to do multiple things at the same time all by themselves, it is essential to have focus, be disciplined and gather the requireddata for that you need to obtain detailed knowledge in order to know exactlywhat steps will prove beneficial for your startups.

Following isthe list of the most common and dangerous mistakes the CEOs and executives ofstartup companies make that you can avoid:

1 Scaling up too fast

One of themost common mistakes that are made by companies in the startup phase is thatthey try scaling up their startup business on the basis of just one or twoclients they start believing that they have proven their mettle in the market.

Although theexcitement is understandable it is extremely essential to validate yourbusiness module before you think of scaling up your business as even if youhave more than 2 clients as a startup you still have to experience the fulltraction of the main market. You have to understand that the people that arebuying your product are the people who generally tend to try out a variety ofthings, but your main aim should be of reaching the majority. The process ofbridging the gap between the minority and majority however can be difficulttherefore this is the point where the majority of the companies get stuck up oreven go down entirely, so it's quite necessary that you test your product on aregular basis to cheque whether the product is market fit and always haveknowledge about the ideal customers for your product. Also, the success gainedwithout the right presentation and strategic focus does not last for long  In order to successfully scale your businessyou need to be ready to acquire microscopic knowledge about all the aspects,especially at the time when the demand for your product is at a higher scalethan expected, it is quite essential that you have acquired detailed knowledgeabout the unite economics of these orders as well as the efforts that led tothose orders and also including expenditure that has occurred during thisprocess and compare them in terms of having these orders have actually turnedout profitable.

The otheressential part is not to get excited by the top-line numbers, as the process ofrapid growth comes with additional costs that is more employees, moreinfrastructure, and a lot more of everything so it is quite necessary that youare fully prepared in successfully taking the additional responsibility that ismentioned above if not it will surely cost you in a big way. In any growthphase, it is quite essential that you dig deep in order to ensure that thegrowth is sustainable and consistent.

2 Lack Of Focus And Alignment

The thoughtof scaling your startup occurs when your company gains more traction, but yourcompany gaining more traction comes with added responsibility and more complexdecisions this process of taking such complex decisions can build-up addedpressure and this added pressure can cause you to make poor decisions that canhurt your potential for success and can even result in your downfall. There arenumerous companies that could not be successful in raising their startups asthey could not cope with the excess of opportunity, and in order to preventthis from happening to your startups where there is excessive stress and disorganizedmovements in all directions, it is highly important that you know exactly whatyour focus is. that means you gain total knowledge of what you are doing alongwith gaining knowledge about the things that are to be avoided.

It is quiteimportant to understand  that during thisphase of your startup there is no need for you to try to add new features orrelated products as once you have achieved a product that fits in perfectlywith the market and on the basis of that product it is encouraged you in elevatingyour startup it is highly essential that you consistently maintain the value ofyour prime product in the market  beforeyou start building new stuff.'

One way thatprovides you assistance in this process is that you can hire the services fromcompanies that offer business growth advisory, one of the upcoming companiesthat provides one of the best business growth advisory services is Factsheet,as Factsheet provides their business growth advisory that covers all thenecessary aspects right from assistance in business plan & modeling tobusiness ideas valuation this assistance is provided by a team of highlyexperienced experts of Factsheet that assist you in such a manner that youacquire the desired results. One of the major highlights of their services isthat their team of experts also provides assistance in formulating specialstrategic plans that is easy to communicate with your entire team through whicheach and every member will be working as one and help you in achieving teamalignments.

In order toget your startup to scale up, you need to have the right goals and metricsplanning in place that needs to be transparent for everyone on the team asalignment focus and commitments are the main factors that determine the fastgrowth of your business is sustainable or not. Each and every person makesmistakes but the key aspect is being aware of them, this is one of the waysthat can help you in identifying what works and what doesn't as what you don'ttrack and measure you cannot improve.

3. Hiring prematurely:

One of themost common mistakes that the startups tend to make in their period of growthis that they higher too fast , as during the period of rapid growth the demandfor your product is at an all-time high and the manpower that  is required in order to fulfill these demandsis low in order to fulfill the excess demand that occurs during the rapidgrowth many startups tend towards hiring employees in a very quick mannerwithout following the proper steps for highering that results in higheringemployes that do not fit into the company culture at all that definitely hurtsthe company s morel in the most brutal way , as the wrong candidates caninfluence others into sharing bad habits with each other and that can result ina drop of  productivity per employee , toavoid this situations it is also important that you stay lean there is no needfor highering too many people ,rather you can go for a smaller motivated and ahighly productive team rather than opting to go for a sluggish team with poormorale.

Having saidthis it would also not be beneficial for your startup to delay the process ofhiring new employees for too long as the failure to deliver is among the corereasons behind business closures it will be beneficial in making the hiring processmore efficient by highering employees that believe in your vision.

4. Mistaking Leadership for Management :

When thecompany that you have started is still in the initial startup phase it can bepossible for you to handle all the functional roles, but if you believe thatyou can continue the same process in the future this decision will definitelyturn out to be a fatal mistake. In order to remain on the right track thatultimately leads you towards achieving your ultimate goal, it is highly crucialthat you stick with your primary role that is leading, and don't start managingthere are many examples of startup companies that experienced the consequencesof opting to go for managerial as well as the business leader role.

Opting to gothrough with both the roles as the owner of your startup can gain success  but this success will definitely be for ashorter period of time as through a certain period of time you will come toterms with the real situation as continuing with the same approach will lead youin experiencing your business to stretch out too thin and also will lead toloose connection with your staff on the ground that results in losing focus andflounder as the connection between the entrepreneur and the  team on the ground is considered to be one ofthe major aspects in order to help the startup in scaling successfully.'

As the mainrole of a business leader is to inspire others, make connections, securefunding for their companies, and have a vision in order to achieve continuedgrowth the leaders are also considered to be the ideal machines and thequalities of a good manager highly differ from those that of the leader, it ishighly necessary that you leave the execution part to those who are great atit.

5 Lack Of Setting Long Term Goals:

Goals aremeant to give you directions and help you in remaining on track duringday-to-day operations. Focusing on setting your goals that are smart, can helpyou in identifying your future path and in return provides you with much-neededassistance in formulating specific action steps needed to get there.

It is highlycommon that startups and scale-ups set up goals but they are for a shorter timeframe that is based on monthly, quarterly, yearly, or 2to 5 years goals formeasuring their progress they fail to define their long-term goals. If you failto identify the long-term goals the short-term goals that you have set mightend up being the wrong ones.

In order togain agility long term goals are often overlooked but they often forget inorder to gain agility you first need to know where you are going, and in orderto gain agility you need to make quick and smart decisions and in order makesuch decisions, you need to attain a clear sense of direction.

6. Over customizing:   

One of themost common mistakes that fast-growing companies make when they start to scaleup is that they say yes to every request that the customers make which canresult in the risk of overpromising and under-delivering.

There aremany examples where startups end up giving the customers too much power interms of fulfilling all the needs of every consumer without taking the majoraspects like asking yourself does the startup have the capability and themanpower that is essential in order to successfully fulfilling all therequirements of their customer.

It will bemuch more beneficial if the startups try to fulfill only those needs of theircustomers to which they have all the required backing in terms of manpower andall the other aspects that will be required in order to fulfill those needs.

7. Focusing On Marketing Too LittleToo Late :

One of themajor mistakes that the startup founders make is that they assume that theydon't need to market and that their customers will find them directly as manyof them believe that marketing is a function that is not as necessary as someof the other aspects in a business, they only use marketing as the last optionsin order to gain traction, but thinking that without proper marketing you cangain major sustainable growth all by yourself is a bit naive.

The best typeof marketing that would be beneficial for your business is based on the type ofservices that you provide, and the marketing strategies that are based on thetarget audience, this marketing can be in a format of traditional advertising,online marketing, or content marketing but in order to scale marketing, youwill need strategic choice with clear KPIs and ROIs that are well measured. Toolittle strategic focus on marketing san also results in becoming independent onone marketing format only that can affect the reach of your business.

8. Postponing The Next Round OfFunding For Too Long

At this stageof your business running out of money should be avoided at any cost, and inorder to avoid this, you need to be ready with the action plan to impressinvestors early than you may have intended.

VentureCapital firms that invest in the later stage are more risk-prone than yourearly-stage or pre-revenue investors, attracting them is much harder andtime-consuming in order to seal the deal. But in order to grow your facility,you need fast cash.

One of themajor aspects of the Ceo s job is hunting down funding with a strategicapproach, if not approached strategically and you fail to partner up withinvestors for the long run this can very well result in sinking your startup.

Thesuccessful term of growth in business is having an ample amount of cash in handin order to invest in marketing, and sales, and to build a team that supportscustomers. Often in the early stages, startups are interested in any source offunds, they don't strategically choose their investors they need to partnerwith those who can fund successive rounds of investments as the startups don'ttake the strategic approach they end up having to hunt down new sources offunds on a regular basis this process takes a lot of time and makes it hard tomatch up funding time with the need to cash to grow

In thescale-up phase apart from the difficulties that business leaders are mostlikely to experience in their quest to impress their investors it also becomesmuch more challenging to estimate your expenditure correctly.

9. Lacking A Scalable Infrastructure :

As you planto grow your company nothing scales automatically unless you are systematicallyset up, for scale for which you need to have the right infrastructure in placethat consists of systems, procedures, and physical space in order to keep thepace and make optimal use of your companies momentum.

One of themajor aspects of the scalable infrastructure must-have is a separatecommunication department as there are many examples that indicate that thereare a lot of startups that expect communication naturally evolves with growthis a wrong assumption as it is a lot easier to communicate the changes andprogress to a few people but if you're in the process of growing your businessalso includes the increase in the number of people that are involved with yourbusiness as the number of people associated with your business increases itbecomes much more challenging to communicate with all of them at the same time.

During thephase of rapid growth, it is much more likely for messages to getmisinterpreted, key points to get lost, and wrong assumptions to be made and inorder to avoid this happing with your startup it is much more essential for youto invest in your companies communication infrastructure as to be assured thatevery one that is associated with your organization stays on the same page. Thenext aspect of your infrastructure that has to be set up properly is the ITinfrastructure that does not only include having the right system in place forcommunication and execution it also includes investing in redundancy.

10. Not Being Agile:       

As the onlything that is consistent in the business market is change, unexpectedsituations occur, market trends change, and competitors can pop out of nowherefrequently leading you to make changes in your course quickly at any point oftime especially in the case of startups and scale-ups if you are not aware andagile enough to take quick actions in order to encounter the unexpectedsituations that can very well be the reason of your downfall.


If you areexperiencing speed breakers on your road to major business success, it is veryimportant that you remember that you are not the only one that is traveling onthis road there are others too that have experienced similar types ofchallenges that you are experiencing.

In order toavoid these speed breakers, you can always implement the tools and strategiesthat have proven to work for others that were facing a similar type ofchallenge on their road to success.


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