Why most startups fail – and the most important reason for this

When I got here across the world of Venture Capital as a startup mentor for the first time, I used to be convinced that the company’s success depended only on the idea, market and financing. It seemed logical that finding the perfect combination of those elements would guarantee success. However, for years I noticed that the most important factor is the team.

People really do or break the startup. Even the most promising project with a good idea may crumble attributable to internal conflicts. What’s more, a lot of what will be hindered by startups will be determined if it is detected earlier.

Stories about failure

One of the most memorable things I’ve ever witnessed was the one company in which I used to be a consultant at the early stages. They had a great product, strong investors and a promising market. However, the disputes between the founders began Śnieżki. Initially, there have been only a few arguments regarding budget allocation and who took partners’ meetings. Over time, these controversy spread to private attacks and began to erosion trust in the team. The tension increased, the atmosphere of the team deteriorated and eventually key members left the project. Investors lost their confidence without consistency, and the company closed before it realizes its potential.

Otherwise, the rapidly developing startup suffered from the lack of transparency of the role among co -founders. They couldn’t agree who would manage on the strategy and who would manage operations. Each founder saw some tasks as his own responsibility, resulting in conflicts, duplicate efforts and a demoralized team. The startup lost his concentration, didn’t hit critical terms and never arrived on the market.

Why conflicts are so destructive

In the startup environment, in which every minute and resources count, conflicts cause chaos. Unresolved problems distrust, lower performance and morale of injury. Over time, the best employees may leave, and investors may lose their faith to the company’s future.

It is true that the conflicts are not bad, and if accurately managed, they’ll stimulate creativity, show weaknesses and build strong teams. The problem concerns the way you deal and deal with things. The key is the way you address and move in these situations.

Common reasons for the conflict

First of all, to know the right way to manage an effective conflict, you have to concentrate on the sources of conflicts. In my experience, the most important causes are:

1. There is no time to debate things for a very long time in startups, which ends in misunderstanding and errors.
2. Regardless of whether it is money, time or talent, resource deficiency causes tension when team members compete for what is available.
3. An ambiguous duties cause conflict and conflict, and people perform unnecessary work or forget important areas of labor.
4. Various visions of success could cause constant friction in the team.
5. The greater the pressure, date or uncertainty, the more small things grow to be strangled.
6. Personal ambitions can overshadow the company’s goals, especially when strong personalities compete for dominance.

Disaster avoiding strategies

Open and honest communication is the basis for the successful team. Regular meetings in which team members can openly share challenges and suggestions, help discover potential problems early. For example, one company I cooperated with implemented weekly controls that created a space for employees to specific problems.

This approach softened tension and helped build trust throughout the world, due to which everyone feels heard and valued. Transparent communication reduces misunderstandings and supports the trust environment, encouraging team members to cooperate more effectively.

The next key aspect of the team’s success is to obviously define roles. Everyone must understand their duties thoroughly to avoid confusion and ineffectiveness. You can conduct a one -day workshop especially to stipulate individual roles, which eliminates uncertainty and significantly increases overall performance.

In addition, developing emotional intelligence is vital for leaders, especially in startups. The ability to acknowledge and manage emotions – each of them and her team – helps leaders move in difficult situations and resolve conflicts before they escalate. Also, encouraging cooperation is vital in supporting the United Team.

The transition of focusing on individual achievements for a team -oriented purposes creates a sense of a common goal, with bonuses related to the group’s performance. Taking a number of perspectives will be a powerful advantage. Instead of avoiding differences, teams should learn to understand and use them to get a competitive advantage.

Turn the conflict into growth

This is indeed a higher level of conflict management. You don’t just look at the conflict as a technique to solve the differences, because it is really a platform for the possibility of improvement. For example, I know one startup, which was capable of consistently argue about his strategy: after some fights he introduced a recent product to the market, which now became the company’s best earning.

If you’re feeling the brewing of the conflict, do not ignore it. Rather, openly deals with fears, listen and look for compromises. Also keep in mind that not every crisis is simply a challenge. This may even grow to be an opportunity to strengthen and strengthen the position of team members.

Although the startup will certainly cause a conflict, this does not all the time have to suggest that you need to be afraid. The conflict will be the best tool for creating the possibility of further development and innovation in an environment with the right approach.

Be proactive, open and willing to learn from each other. At the end of the day, the startup’s success depends not only on his idea or market, but also on how consistent and productive people in this team will be.