Reasons why most startups fail within first 3 years?

Published on Oct 23, 2018

Last updated: Mar 31, 2025

Reason why most startups fail within first 3 years is the absence of courage to go beyond our own limits and depending on the outcomes of our new acts. Check out this blog on why most startup entrepreneurs fail so early, shutting down their first venture, mostly within their first three years of inception.

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Startup execution is not as simple as most of us think of. It takes guts to start anything new. Then, it needs all your time and focus to continue your new startup.

If you think that you are an expert and can do everything then possibly you are committing a mistake. Because if you haven't started any venture in past then you really do not know what circumstances are going to come up your way. So, always be ready for those unforeseen and unpredictable situations during your entrepreneurial journey.

Kudos :) for starting something new anyways.

Top 3 mistakes committed by new age entrepreneurs:

There is no doubt that today's new age entrepreneurs do have better guts and enthusiasm towards taking risks in starting something of their own. Learning exposure and resources to gather knowledge, skills, tips and ideas have grown to a great extent today.

There was a time when if someone plans to initiate anything new, only critics happened all around. But, today is not that case all through. However, criticism didn't end yet, especially from relatives and neighborhood. In India, "लोग क्या कहेंगे" mentality still exists in many families in all societies and classes of lifestyle. But, still many are getting strong will and overrides all such critics and launch their first startup.

Even if they start something new, but due to belonging from our own societies, few of the problems that we do have is our belief system inherited from our society. Henceforth, we become more prone to such mistakes which sometimes end in our failure.

If you have also initiated something of your own but failed to continue, do share with me in comments. I'll be happy to know your story.

So, the mistakes most of us commit are:

Lack of Funds
Intense pressure from society
Vision conflicts

Why lack of funds when we have access to angel investors and VC firms?

Obviously, today we do have better access to angel investors and VA firms. But, most of the VCs invest in an idea which can result in great ROI and that's absolutely fine. But, if your idea isn'that unique and you believe in taking your firm to new heights on your own, your growth can be at stake.

Either you focus on praising investors or your customers. You cannot praise both at the same time. So, maintaining a good balance in between these two is the key to prospective growth strategy.

How intense pressure from society leads into your failure?

If we're talking about society, it means we're talking about aunties and uncles from neighborhood. It means we're also talking about our relatives who may not know what their children are doing but wants to know what the hell are you doing. It also includes those people whom neither you know nor they have ever seen you. But, still they are worried for you. A single mistake you commit and they'll come to your parents to tease them, insult them.

So, taking into consideration, all these so-called important people who have great influence on how we live and how we think, let'see how a startup entrepreneur fail.

Case I:

If you're not married and have just launched a startup then you're into a big mess dude. Never ever get indulged into talks with so-called important people. If you do, you'll be lost into their nonsense talks.

Consider them as a symbol of "Talking with me is a criminal offense. You will be charged for heavy screw up in your life if you found here".

Case II:

You are recently married and are launching a startup then be patient. Because here you don't need to do anything. Your so-called important people will reach to your in-laws and will somehow convince them to speak to you on this important discussion of not starting anything new.

If they fail to convince then they'll be convinced to inject their (in-laws) money into your venture so that you could be in a totally mess all through.

We should really give an standing 🫡 ovation to these guys.

Conflicts between Vision and Growth Chart:

Startup is not built only on products. It needs full attention and care from its co-founders as well. And, since every human being do have their own perspectives and aspirations. So, sometimes it happens that they do not meet on same grounds. Sometimes, their expectations get changed and they start dreaming of something apart from each other. Here comes the situation of conflicts.

Obviously, investors want to see the growth chart. You cannot keep convincing your investors on the basis of your vision only. And, when two co-founders start focusing only on one aspect different from another one's, the conflict might lead into their breakdown.

What should be the core focus of startup entrepreneurs?

A startup is meant to grow into an enterprise. An enterprise is no other than a business institution into self-sustaining position. And, no business could survive of it doesn't have enough sales to meet their expenses apart from making extra revenue to encash profits out of it.

But, it does not mean that sales is everything.

Sales matter a lot but for shareholders, not all stakeholders.

For other stakeholders like employees, society, and government, the vision is quite important. And, that too if the vision do have something positive for them. And, a right vision also keep everyone bindu together and emotionally in touch with each other.

So, as a promotor of the startup business, it is your responsibility to maintain a healthy balance in between the two aspects of any business viz Vision and Growth Charts.

Why startup entrepreneurs fail?

There's a quote said by someone, I don't remember where I heard. So, he said:

We start for doing something good. Then, we commit some mistakes and to rectify those, we have to either stop trying and start living with its guilt or we sometimes have to go out of our own limits and have to depend on the outcomes of our new acts.

Either way, we become an evil for many. We cannot keep everyone happy. And, here comes the fact where sometimes most of the startup entrepreneurs fail; same was the case for me.

I tried hard to keep my clients and team happy. I did whatever was possible for me to do the best thing for my team. Even if all they knew the fact, realized it but wasn't with me. And, I lost the game.

Anyways, I'll share my own failure story in another article. For now, let's continue with our discussion.

So, what does that quote mean, I just mentioned above.

Entrepreneurs start with a good vision. But, as soon as they enter into the startup world, they are forced to become the part of race. A race decides your success and failure. But, it takes away your vision sometimes. That's the biggest mistake, I believe a startup entrepreneur makes in his/her entrepreneurial journey.

Becoming part of this race, trying to maintain a balance between all stakeholders, fulfilling personal aspirations of each and every individual involved in the startup, it happens that they (startup entrepreneurs) are lost in this world of startups. Their vision starts conflicting, growth charts starts going down and funds starts vanishing as a result.

All this sometimes or you can say for many times result into venture shut down. Henceforth, counted as a startup failure or failed entrepreneur.

Useful Links:

There are few more pointers that should be highlighted if you're an entrepreneur or have started something in past. Instead of discussing everything here in this article, I'm gonna share those stuffs in different articles.

You can find their links below:

Reference Books/Resources:

Since, I have read only few books related to these subjects. So, I cannot highlight much at this moment. But, I'll suggest few activities for you to be undertaken as part of your daily schedule. And, don't worry, I'll mention some reference books or links to reference resources in my future blogs. This all will depend on my learning and reading in coming days.

So, the activities I'll suggest are:

Keep a learning attitude. Fix at least 30 minutes per day.
Share what you learn.
Control your temper.
Don't give up and keep trying.
Do at least 15 minutes of Yoga daily.
Know your expertise and keep on improving it.
Find your weaknesses and work on improving those.
Spend less (or no time) on TV and other time-wasting activities.

Thanks for reaching out till here. Don't forget to share your views in comments. I hope you have liked my writing skills and keynotes shared above.

If you do, pass it on with your buddy entrepreneur friends, else do write to me.

I'm not an expert, just sharing what I knew and learnt based on my personal experiences. Your experiences can differ, henceforth our views and perspectives too.

Keep doing. Keep learning. Keep sharing.

Have a Happy and Adventurous Entrepreneurial Journey. 💪🙂🙂

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Why most startup entrepreneurs fail within their first 3 years of execution?