Top Reasons Why Startups Fail and How to Stop It

The reasons why they fail could be a problem with communication, the team, lack of focus or unforeseen situations among other things. However, if yo

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The reasons why they fail could be a problem with communication, the team, lack of focus or unforeseen situations among other things. However, if you are aware of such reasons and how to stop them, your business stands a better chance for survival.

Here are the top reasons why startups in a remote setting fail, and some tips on how to avoid and stop them.

1.      Wrong business model

Remote working comes with a lot of benefits including saving money on office space, ability to land exceptional talents affordably and improved work-life balance. Such promises are enough to entice a lot of people to set their startups remotely. The unfortunate part is that most don’t stop to ask if their idea fits well in a remote setting. They only realize that their strategy isn’t built for remote work when it is too late.

Before you dive into remote working, assess your business idea thoroughly. Ask yourself if your business plan qualifies to be a remote business. Will a remote setup serve your business goals? Don’t start a remote business just because it is the buzz in modern business, or because you want to save money.

2.      Burnout

A thin line lies between work and life when it comes to remote work. There is a lot to do for the startup at the setup stage. This is the time to hire and manage employees, roll out marketing strategies, deal with business registration and much more. This coupled with life demands can easily lead to a hectic work schedule and eventually burnout.

It is important that you have a solid schedule of how to deal with all your demands. Have specific hours where you deal with work and ensure that you don’t mix it with personal tasks. It also helps to get some tasks on your plate. Since it is a remote setting, you will have employees spread across the world. Instead of worrying about payroll compliance in each country that you have workers, consider using Global PEO. The organization will take care of the administrative task, ensure that you are compliant with the tax and labor laws, allowing you time to take care of other issues.

3.      Lose of focus

It is not uncommon to hear someone who has succeeded in remote work managing multiple companies at the same time. Most startup owners want to copy these gurus, so they start several remote businesses at the same time. If not starting several companies, others want to launch several products at the same time, or take up numerous projects simultaneously. While a small percentage succeeds working this way, a bigger percentage finds themselves with lots of unfinished projects in their hands, which eventually fail due to the divided attention.

It pays to focus on one thing at a time. If your dream is to run several remote businesses, focus on building one at a time. You can then use the expertise learnt to launch the second one and the third one. You can also use a mentor to help you focus and call you out whenever you deviate your energy to other things.

4.      Wrong talents

As said earlier, one advantage of remote work is that organizations stand a better chance to hire great talents since startup owners are exposed to a global talent pool. They will take this advantage to bag the most qualified individuals, but fail to focus on one thing; assessing whether they are fit for remote work.

An individual can possess all the qualifications for a certain post, but if they are not cut out for remote work, they will fail the position sooner or later. Remember you need these employees to help you carry and execute your vision. If they can’t be productive, your startup is bound to suffer.

Before hiring employees for your remote business, ensure that you have put in place a hiring process fit for a remote set up. You will need to conduct interviews, but unlike that of a traditional office, you must go beyond that. Seek to find out why such individuals would rather forgo the 9-5 job that comes with high perks to work remotely. Ask them how they get through the day and how they stay motivated. Do they fit in with the company culture and the rest of the team? How are their problem solving skills? At the end of the day, you want employees who are self-motivated, self-starters, self-disciplined, have excellent time management skills and require minimal or no supervision among other skills necessary for remote work.

5.      Lack of clear communication

Organizations with remote workers thrive in good communication. Since everyone is working in a remote location, communication happens virtually, which increases the chances of miscommunication of instructions. This can lead to people messing up with projects, missing deadlines and deviating from the company goals and objectives. Of course, this can’t sit well with clients, which can make them pull out of the business.

It is important to ensure that everyone is working on the same page if you are to deliver quality work in a timely manner. This is also important if you want to stay on course with your goals and objectives. Ensure that you give clear instructions and guidelines to your remote workers. If you feel it is not clear, seek to clarify further.

6.      Poor collaboration

Unlike in a traditional office where people work in close proximity with each other, remote workers work in isolation. This lack of human contact can make employees become lonely or detached from the rest of the team. The result would be demotivation and decrease in productivity, which if not checked can lead to business failure.

For remote workers to remain optimally productive in their tasks, it is important to create a human feel in the setup. Just as a worker in an office will walk down the hallway for a brainstorming session with a colleague, interaction between remote workers needs to feel instant. Utilize modern communication tools such as Slack where employees can interact with each other and help each other out in their tasks. Hold regular video conferences for employees to be familiar with each other. In addition, the meetings should not be all about work. Allow a few minutes for people to catch up and chat on other issues before getting down to serious business. Don’t forget to have virtue team building sessions once in a while.

For remote workers to feel as part of the team, ensure that you celebrate with them on their pivotal moments. In addition, have a system to recognize and reward outstanding performances.


There you have it, the reasons that can easily pull down your remote startup. Technically, it all boils down to having a product fit for a remote setup, the right team and a culture of collaboration.

Now that you are equipped on the best ways to mitigate them, you are set for success.