This is a tough question to answer. It is just as tough as telling you why startups succeed. The problem is that there are many things that can lead towards a startup failing. You have to consider the following but remember that you are not restricted to these reasons. We will just try to highlight as many situations that lead towards startup failures as possible in 1000 words so you do not get bored.
Only One Founder
Most of the successful startups had more than one founder. It is always better to start a business with someone that you can trust since two heads are definitely better than one. What many do not understand is that there is a lot of work that is associated with running a startup. For most people out there the stress is simply way too much to handle. As there is nobody to talk to, it is much easier to make a bad decision that would lead towards the startup failing.
In most cases a startup will prosper in one location and will not be successful in another. Statistics show that the startups in Silicon Valley are the most successful. The success in New York City is just one in 20. Remember that some cities are simply startup hubs while others are not. You want to be surrounded by professionals in your industry. Find out where they are. That is where you will need to be and where your startup will have the highest possible chance of success.
A Marginal Niche
Most startups basically choose one niche that is obscure and really small since the owner wants to avoid the competition. That is not always a good idea. Marginal projects are basically the equal of gambling. You need to realize that whenever you do something well, competition appears. You should never try to avoid competition since it is the competition that makes you grow your project and make more money for your company. The best ideas appeared in the most competitive niches out there.
Imitating Something Else
It is really difficult to come up with something original. This is something that every single successful entrepreneur knows. However, many fall victims to simply imitating a company that already exists. While this is definitely one idea source, it is definitely not the best one. The best thing that you can do is come up with something new by identifying a need that a group of companies or individuals have and that is not properly fulfilled. Remember that Google appeared because the founder was not able to find what he was looking for on the internet. By making sure that you offer something that is needed, your chances of success will be a lot higher.
Not Changing The Original Plan
Some startup founders are stuck on what they believe is the best thing for business. Sometimes what you think is best is not actually what brings in the best results. Instead of not changing the plan that you had, try to adapt it so that the best results are obtained. A startup will naturally run into problems. When that happens, plans may change. Be open to new ideas but make sure that you do not change too often. If you are stuck, talk to the clients. Ask for feedback. They can give you much more valuable advice than what you could come up with alone in most situations.
It is not you that is the backbone of a startup. The owner is basically the leader but most of the work will be done by the people that are hired. Hiring someone that is really good for a company that just opened is quite tricky since there is no guaranteed job stability. However, if you manage to hire people that really know what they are doing, your chances of being successful will drastically increase. You have to be sure that your staff is experienced. If that is not the case, you can easily end up failing without realizing why that happened. This is especially true as the startup expands. When this happens, you can easily lose track of everything. You surely do not want this to happen.
A Slow Launch
It is not that easy to launch a company. You surely already know this. The big problem in most cases is that the owners are afraid. They want to control everything. While this is completely normal, it can so easily lead towards various problems. When you delay the launch too much, you lose the interest of the people that are involved. At the same time, if you did create some buzz around the launch, you will instantly lose it. You have to always be careful that you properly balance speed with effectiveness. If you do not do this, the slow launch can easily destroy the entire startup even before it has a chance to expand.
You have the perfect idea that you know is going to work. You have a product that people need and want. It is time to quickly launch. Right? Wrong! You have to be sure that your business plan is proper. If that is not the case, you can be sure you are going to fail. There are way too many startups out there that are launched in the heat of the moment.
The truth is that slow launches did kill so many startups that could have been really successful. We can say that it is possible to launch too slow or too fast. Make sure that you have a really good business plan. This is what helps you the most in being successful with a startup since you need to have everything properly planned.
Startups can easily fail because of the reasons that were highlighted above. However, others do exist. If there was just one reason that we would choose as being the most common met, it is the lack of a solid business plan. Do start with that and do learn all that you can about what you have to do in order to launch a successful startup.