According to a study published on the UK Startups platform, around 60% of new startups in the United Kingdom shut down within the first three years. The main reasons are predictable but critical: lack of product demand, insufficient funding, weak management, no clear business strategy, and poor understanding of the target market. Statistics also show that only 42.4% of UK startups survive beyond the five-year mark – meaning most don’t even pass the basic viability test in a competitive environment.

Why does this happen?

After years of working closely with entrepreneurs and early-stage teams, I’ve observed a number of recurring patterns behind startup failure. And those are exactly the insights I’d like to share with you.

1. Entrepreneurs go into business without understanding the market or what exactly they’re selling

Entrepreneurs often don’t fully understand the market they’re entering. They lack a clear vision of what exactly they want to build, who their target audience is, and how to sell to them.

It’s not uncommon for business owners to dive into a field where they have neither experience nor deep expertise. For instance, a founder might decide to launch an accounting services company without having any professional background, knowledge of the market specifics, or a grasp of how to position and sell those services effectively.

As a result, they become entirely dependent on the team, lose control over key processes, and are unable to evaluate the quality of what’s being delivered.

2. A technical product with no technical founder

According to an analytical report by CB Insights, one of the leading sources in startup analytics, 23% of startups fail due to having the wrong team. In many cases, this is because non-technical founders launch tech products without a technical co-founder, or hire a team without the ability to properly assess its work. The result is a lack of quality control, development delays, and a vague or misaligned technical direction.

CB Insights cites a telling comment from one founder whose startup didn’t survive: "We had a beautiful product, great design, but no idea how to manage engineers or define a technical roadmap." This issue is one of the most common among non-technical entrepreneurs operating in technical domains.

I’ll explain why below.

At first glance, building a tech product may seem like a fairly straightforward task. But when a non-technical founder takes it on, challenges often begin right from the start. Assembling a team from scratch is hard – and knowing what to do with that team is even harder.

Sometimes, founders create detailed specifications, outlining exactly how the system should work, complete with extensive documentation and technical requirements. But once development begins, they’re surprised to find that the budget is bursting at the seams, and the actual cost of the system is far higher than expected. The reason is simple: they’re unable to independently evaluate what’s really happening in the project and are completely reliant on whoever happens to be on the team at the time.

As a result, developing the tech solution becomes both the startup’s core objective and its biggest challenge. Founders often focus solely on design or “big” features, while ignoring the technical foundation. They assume that if the product doesn’t look as sleek as competitors’, no one will buy it. But in reality, a weak technical backbone is far more likely to kill the product than an imperfect interface.

3. A strong product, but no sales strategy

One of the most common mistakes technical founders make is getting lost in endless development without understanding how to bring the product to market. The team may spend weeks or even months writing code, refining the architecture, and fixing the tiniest bugs. The entire focus is on functionality, code quality, and the logic of the solution.

But while all of this is happening, one crucial question remains unanswered: who will use this product, and why? The product is being prepared for launch, but there's no strategy and no real understanding of the market. And in the end, perfect code can’t make up for the absence of a user who truly needs the product.

4. A founder without a full-spectrum view of the business

It’s a great advantage when someone is a strong marketer. And it’s equally valuable when someone is a skilled techie who can write high-quality code. But that’s often not enough.

A marketer might be great at selling – but that doesn’t necessarily mean they understand what needs to be built. And someone who knows how to write code doesn’t automatically know how to sell.

What truly matters is developing a well-rounded understanding: what to build, how to build it, who to sell it to, and how to present it effectively.

5. Design is a starting point, not the whole project

In the early stages, founders are often captivated by the process of designing the interface. Changing button colours, brainstorming features, drawing inspiration from Facebook, Google, or other big companies – it all feels exciting and easy.

But once development begins, unexpected challenges start to surface – ones no one considered at first. What looked like a “small detail” in the mockup – say, a notification bell, Face ID login, or SMS verification – suddenly turns out to be complex and costly to implement.

If the team doesn’t pause in time to separate the essential from the unnecessary, they can end up spending months building features users will never use, or things that could have easily been skipped altogether.

Why startups should launch fast, not perfect

A startup is always about uncertainty and risk. It’s not a ready-made business with a proven model and clear financial metrics. In many cases, it’s built on investments, grants, or the founders’ personal time. But even with resources, a startup remains at its most vulnerable stage – the point of maximum risk.

At this stage, the core mission is to figure out:

• Does the market actually need your product?
• Can you sell it?
• Will you run into legal or marketing constraints that could block your growth?

Here are a few simple principles that can help you avoid this mistake:

• Don’t invest large amounts into a hypothesis. Test it quickly and simply
• Go to the market fast. Don’t wait for the “perfect” product – try to sell it now
• Use off-the-shelf tools. Templates, website builders, and easy-to-set-up hosting platforms can save you time and money. Avoid complex solutions like AWS or GCP in the early stages
• Your goal isn’t to build a flawless shell – it’s to find proof that people actually need your product

How do you do that? Make just one sale – and you’ll quickly see what you’re missing

The simplest and most valuable step for a startup is to try selling the product – just once. Then once more. And again. It’s at this stage that the real gaps become visible. Imagined readiness collides with reality: there are no contracts, no mockups, no tech solutions, no support processes. Sales quickly expose weak points that are hard to spot from the inside.

If you have the ability to design on your own or adapt a template – look to the best in your industry. Analyse competitive markets where products evolve rapidly due to intense competition. These spaces are constantly generating new ideas that shape market standards.

You don’t need to start with complex tech systems. Your website can be built with just HTML and CSS, as long as it looks professional and mirrors the approach of industry leaders. Handling orders manually? That’s absolutely fine in the early stage.

Your first customers will be random, spontaneous, and demanding – but they’ll also provide the most valuable feedback. That’s how you’ll clearly see what works and what doesn’t. And that will become the foundation for future growth.

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