5 Signs Your Startup May be in Danger

Like the human body, businesses experience symptoms when they aren’t doing well. The human body offers a number of telling signs, including headaches, nausea, loss of appetite, feeling unsteady or shortness of breath. When it comes to a startup, signs can be just as physical, but can manifest in a number of ways, from hemorrhaging cash to disorganization to operational dysfunction. There are countless signs, but you’ll find five listed below.

You Can’t Focus

If your company doesn’t have consistent focus that’s a bad sign. In its early months, focus and footing are invaluable. While the “do everything for everybody” approach is admirable, it’s an unfeasible endeavor that can sink your business. Startups tend to have limited resources, so founders must choose wisely when deciding what they want their business to accomplish. Shifting gears mid haul could end tragically.

You Can’t Stay the Course

Again, don’t let your company’s mission escape you. An original idea can easily become diluted when unnecessary changes are made to pricing or delivery. If your company has always been known as a tool for creating custom phone cases for $9.99, don’t continually change the products or the cost on a whim. The inconsistency of your company means that customers can no longer depend on you to deliver a particular product and a particular price point, and it also reads as a loss of passion for the original product.

You’re Not Ready for Success

Having a great idea means nothing if you haven’t decided that you’re going to succeed. Not only does a startup have to have a strong or interesting idea, its founder has to have a desire for success. Rookie mistakes, such as dumping all funds into marketing and failing to hire competent workers, can ensure failure. Instead, put money into polishing a product or service, and if you can’t realistically do everything for your business, hire someone who can.

You Don’t Know if Your Business is Legally or Morally Sound

Grooveshark is a prime example of a great startup that found itself struggling due to legal oversights. However, Grooveshark certainly isn’t the only company that’s gotten shut down or dissolved due to an error in judgement. Turntable.fm, Napster and a number of other met similar fates due to difficult conversations that involved royalties, copyrights and permissions. Do your research.

You Didn’t Make an Independent Product

If your business hinges on someone else’s business or services then it’s possible that your business could bite the dust. Twitter and Facebook are just two examples of businesses that other startups gather around and attach themselves to, leaching from. Unfortunately, businesses such as TwitPic and Lookery found that big social media platforms didn’t want others to drink from their success, and took look legal action against them. If choosing to lean on major social media platforms, it’s necessary for startups to establish an independent identity that distances it and makes it a more reliable product. Likewise, don’t solely look to Google results, and stir clear of channel dependency. The dangers of putting all of one’s proverbial eggs in one basket are that they’ll all get smashed if dropped.


Eddie Dovner is an entrepreneur, inventor, and CEO who is based in West Palm Beach, Florida. Learn more about Eddie Dovner by visiting his pages on LinkedIn, Twitter, and SlideShare. Also, please learn more by visiting EdwardDovner.org and EddieDovner.com.