Startup mentor, was convinced that the success of a business depended solely on the idea, the market, and the financing. It seemed logical that finding the perfect combination of these elements would guarantee success. However, over the years, I have realized that the most critical factor is the team. People really are the ones who make or break a startup. Even the most promising project with a brilliant idea can crumble due to internal conflicts. More fundamentally, much of what hinders startups can be fixed if caught early. At a company I consulted for, I saw how lack of focus doomed these startups.
I witnessed something memorable. They had a great product, solid investors, and a promising market. However, the disagreements among the founders began to accumulate. At first, there were only a few debates about budget allocations and who could attend partner meetings. Over time, these controversies turned into personal attacks and began to erode trust within the team. Tensions increased, the team atmosphere deteriorated, and, eventually, key members left the project. The investors lost confidence due to the lack of cohesion, and the company closed before it could reach its full potential.
Possible reasons for decline in startup formation
In another case, a rapidly growing startup suffered from a lack of clarity in roles among its co-founders. They couldn’t agree on who would handle the strategy and who would manage the operations. Each founder saw certain tasks as their responsibility, which led to conflicts, duplicated efforts, and a demoralized team. The startup lost focus, missed critical deadlines, and never made it to market. Why conflicts are so destructive In a startup environment, where every minute and resource counts, conflicts create chaos. Unresolved issues generate distrust, decrease productivity, and damage morale.
Over time, the best employees may leave, and investors could lose faith in the company’s future. In reality, conflicts are not always bad, and if managed correctly, they can stimulate creativity, reveal weaknesses in strategy, and form strong teams. The problem lies in how situations are managed and approached. The key is how these conflicts are faced and navigated. Open and honest communication forms the foundation of a successful team. Regular meetings, where team members can openly share challenges and suggestions, help identify potential problems early.
Startups Fail in Obscurity
For example, a company I worked with implemented weekly meetings, which created a space for employees to express their concerns. This approach alleviated tensions and helped build trust within the entire team, making everyone feel heard and valued. Transparent communication reduces misunderstandings and fosters an environment of trust, which motivates team members to collaborate more effectively. Another crucial aspect for the team’s success is clearly defining the roles. Everyone must thoroughly understand their responsibilities to avoid confusion and inefficiency.
You can hold a one-day workshop specifically to outline individual roles, which eliminates uncertainties and significantly increases overall productivity. Moreover, developing emotional intelligence is vital for leaders, especially in startups. Being able to recognize and manage emotions—both their own and those of the team helps leaders navigate challenging situations and resolve conflicts before they escalate. Fostering collaboration is also essential to promote a united team. Shifting the focus from individual achievements to team-oriented goals creates a sense of collective purpose.
Steep decline in new startup formation
Instead of avoiding differences, teams should learn to appreciate and leverage them for a competitive advantage. This is, in fact, a higher level of conflict management. Conflict is not only seen as a way to resolve differences, because it is actually a platform for opportunities for improvement. For example, I know a startup that was able to consistently discuss their strategy: after some arguments, they introduced a new product to the market that has now become the company’s largest source of revenue. If you perceive that a conflict is arising, do not ignore it. Instead, openly address.
The concerns, listen, and seek compromises. Moreover, remember that not every crisis is simply a challenge. It could even become an opportunity to strengthen and empower your team members. A startup will inevitably generate conflicts, but there is no reason to fear them. Conflict can be the best tool to create development and innovation opportunities in an environment with the right approach. The world of startups is full of stories of companies that have failed because they did not have a market opportunity. In many cases, these new companies simply entered.
Conclusion
The market too early or were providing a solution to a problem that didn’t exist. A good example of a startup that failed due to lack of market opportunities is Juicero. Juicero was a high-tech juicer that was presented as a revolutionary way to prepare fresh and healthy juice at home. The problem was that people really didn’t want to pay $400 for a juicer when they could simply buy a $50 blender and make their own juice. Juicero eventually shut down after spending $120 million in funding. Another example of a startup that missed its market opportunity is Zirtual.
Zirtual was a virtual assistant service that connected busy professionals with remote assistants who could help with things like scheduling, email management, and research. The problem was that there were already several established players in the virtual assistant space, such as Fancy Hands and Assistly, and Zirtual couldn’t compete. Zirtual shut down in 2015, just two years after its launch. The conclusion of these examples is that it is important to ensure there is a market for your product or service before launching a startup. It is also important to be aware of the competition.
