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Why Startups Fail by Oladele Hakeem Olaniyan

Startups fail for different and peculiar reasons especially in Nigeria. There are some factors which are debilitating to young entrepreneurs. In trying to understand why startups fail, and profer possible solutions to checkmate the failure of startups, it is important to understand the meaning of startups in the context of this article 

Startups are new information technology and communications (ICT) businesses that are newly set up. Startups have Techpreneurs, who initiate business ideas, get a team to work with if they can afford, and make the businesses known to the would be clients. An example here is SaaS Startups.

'SaaS' stands for 'Software as a service.' The idea behind SaaS is to provide software in which there is access to the software after a user subscribes to it, and would be used online via the internet without the need to install such software on the computer system. Two typical examples of SaaS are emails (Gmail & Yahoomail) and Microsoft Office.

SaaS Startups provide their clients with different technological services using softwares they built themselves or softwares developed by software engineers, but used mainly for the SaaS Startups. In addition, SaaS Startups are totally in charge of hosting their software, managing it and using it to provide services for their clients.

A good number of SaaS Startups fail due to some common mistakes they make. Some of these mistakes have become recurring decimals. Without making corrections and knowing the actual solutions, the failure will always be imminent. 

Below are some of the reasons SaaS Startups fail:

1. Monetary factor

For anyone to think of SaaS Startups, the individual needs to have a long term budget on what will be needed on digital marketing, brand awareness, online & offline forms of advertisement, use of third party advertising/influential marketing, among others. It is one of the common mistakes that make many SaaS Startups fail. It is not enough for the initiators of SaaS Startups to have knowledge of what they want to do. They must have a robust framework for planning and execution, as well as to keep their business afloat.

2. Poor feasibility studies

Feasibility studies are used to know the market terrain of a particular business. Feasibility studies give a detailed breakdown of expenses, market picture, long term plan, as well as SWOT (strengths, weaknesses, opportunities and threats) analysis of the business. SaaS Startups fail because of badly done feasibility studies or none at all.

3. Poor networking

As the saying goes, 'there is virtually nothing new under the sun.' This means that individuals who come up with an innovation for SaaS Startups would have some established companies or individuals doing what they are about commencing. In order to succeed, such SaaS Startups need to form networking channels with established business. The sad reality however is that the mindset of believing to succeed alone has been a clog in the wheel. This leads to automatic failure of such SaaS Startups.

4. Little or no mentorship

Businesses often succeed when the owner has whom he looks up to for professional advice or a type of business teacher. It is not enough to have gone to learn about SaaS and not have one or more persons to fall back to when grey areas arise in the Startups. 

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