Getting Funded Doesn't Guarantee Startup Survival

Building a startup business will not always run smoothly, even though it has received large funding from investors. At the beginning of this year alone many startup businesses fail because they don't understand the impact on new companies, even though they have received a fairly good investment. Ideally funding should be a good fuel to get startups closer to business profits.

Seeing the causes of failure experienced by startups, it seems to be a valuable moment for digital businesses who are struggling to learn from it. The following factors may be taken into consideration as well as learning for startups who are starting their business.

Poor service and facilities

Maximum service and facilities that pamper users will bring business to significant customer traction. Innovation is also key, because the needs of digital users are very dynamic. Regarding how startups are able to provide good facilities, there is a story about a startup called Auctionata.

Auctionata provides services online streaming since 2012, then the business stalled in February 2017 after previously successfully raising funding of up to $95 million. Before the company closed, Actionata officially joined the auction company Paddle8.

Actionata's failures with service live streaming it happens because of a slow system factor. Even though in the digital era when it required online services, Actionata was not able to save the company from competing against better offerings with a wide range.

Content that does not benefit users

Social media is one of the current trends, so many products try to use a social media-style approach in their products.

However, who would have thought that the leading social network Yik Yak, which was once popular, finally closed its service in May 2017. The reason is really sad, because it is known that there are cyber criminals who have appeared to produce disgusting content and make no sense to end Yik Yak's service activities in the past year.

In fact, since its founding in 2013, Yik Yak has received funding of up to $73,4 million and has a valuation of $400 million in 2014. With the constant terror of cyber destroyers, Yik Yak has not been able to save their capital condition.

Poor management

Sebagai marketplace who have ideal ideas, should be assisted by good management staff so that startup conditions run well. It is not impossible if marketing as the spearhead of finding consumers can maintain the market. Likewise, the management system on which the startup is based remains standing.

This understanding does not seem to provide a response to startup startups that closed in February 2017, Beepi. A company engaged in the service of buying and selling used cars.

The beginning of starting a startup marketplace, Beepi has secured the highest valuation of $560 million from multiple funding received through its 35 investors. Beepi's execution already reflects solid strength, so customer support services are the key to its sales success.

However, who would have thought the company had to be so badly managed by wasting $7 million/month when it hit its peak. As a result, out of 300 existing employees, only 100 Beepi employees went to fair.com after being sold.