Humankind Design

Why Startups Fail: A Guide to Avoiding Common Pitfalls

The Startup Challenge

Starting a business is an exhilarating yet perilous journey, fraught with challenges that can derail even the most promising ventures. In this article, we’ll delve into the top 5 reasons why startups fail and explore how Humankind Design can help you navigate these treacherous waters.

Top 5 Startup Pitfalls

Drawing insights from YC Startup School, here are the top 5 reasons startups often stumble:

No market

There’s no genuine demand for the startup’s product or service. The startup is solving a problem that doesn’t exist or isn’t urgent enough.

Not enough traction

The startup fails to achieve product-market fit, and sales growth is sluggish. High customer acquisition costs or low adoption rates compound the issue.

Not the right team

The startup lacks the right personnel to execute its vision. Internal conflicts overshadow productivity.

Ran out of money

Cash flow becomes a bottleneck, and the startup hasn’t reached profitability. Operating on love and fresh air is not sustainable.

The product was bad

The startup’s offering lacks differentiation or simply falls short of expectations. It’s like throwing a party where no one shows up.

The Co-founder Factor

This is the real pitfall – the co-founders.

  1. No market wasn’t the issue; it was the co-founders’ reluctance to pivot.
  2. Lack of traction was due to the co-founders not iterating quickly enough.
  3. The wrong team was there because the co-founders hired them and allowed them to stay.
  4. Money didn’t just run out; the co-founders failed to make the most of what they had.
  5. Many successful startups begin with a subpar product; it’s the co-founders’ willingness to improve that counts .

Investors often bet on the co-founders, not just the idea or product. Co-founders have the most control over these variables and their ability to learn, act, and iterate quickly is crucial.

The real MVP? Your co-founder. If you both can learn, act, and iterate quickly, you’re golden. It’s like a buddy cop movie, but with more spreadsheets.

Navigating the Branding and Design Industry

Branding and design are essential for any business, but the challenge lies in convincing companies to outsource these tasks rather than handling them in-house. At Humankind Design, we’ve faced our share of hurdles in gaining traction and leads.

We often hear businesses say that branding is important but not a “current” priority, or that design services are too costly, especially with the influx of self-taught offshore designers. Faced with this reality, we had two options: wait for the market to recognize the value of professional branding and design, or take action ourselves.

We chose the latter. By refining our services, we’ve honed in on startups and entrepreneurs who prioritize partnership, speed, and experience. This targeted approach allows us to leverage our strengths where they matter most.


Navigating the startup landscape is akin to walking through a minefield; one wrong step can spell disaster. To sidestep these pitfalls, co-founders must focus on accelerating their learning, action, and iteration processes. Here are some actionable takeaways to guide you:

  1. Finding a Market: Start by identifying urgent, expensive problems that people genuinely care about. Don’t begin with a solution in mind. Use surveys to validate demand and be prepared to pivot as market needs change.
  2. Growing Traction: Before launching full-scale marketing campaigns, gather customer feedback to refine your value proposition and messaging. Speak directly to your customers to ensure your offering resonates.
  3. Hiring the Right Team: Look beyond resumes. Find individuals who align with your startup’s purpose, mission, vision, and core values. Cultural fit can often outweigh experience and skills.
  4. Managing Cash Flow: Budget as if your startup’s survival depends on it—because it does. Know your company’s financial runway like the back of your hand, and set achievable milestones to extend it.
  5. Designing the Right Product: Don’t just build; validate. Use prototype testing to ensure your product meets market needs and solves real problems. Make sure it is 10x better than existing solutions in the market.

How Humankind Design Can Help

Humankind Design accelerates the startup process in three key areas:

  1. Learn: We guide startups on where to focus their learning efforts.
  2. Act: We handle design execution, translating vision into tangible assets, quickly and effectively.
  3. Iterate: We offer a step-by-step guide to help startups navigate through iterations.

We’re not here to sell you a dream, but we can make your dream easier to achieve.

Accelerate - Your Startup Kit. Essential strategies and brand touchpoints to launch and validate your business, fast!

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