1. Failure to investigate the market.

Sure, the idea is great, but is there a market for this product or service? Only some good ideas become good products, and even fewer become sustainable businesses. Entrepreneurs don’t need to hire a Big Four consulting company to help assess a new market, but they do need to learn how to identify what progress buyers are willing to pay for. The hall of closed businesses is filled with products that were great ideas nobody needed enough to give up hard-earned money for. People give up money in exchange for only a few outcomes—with less pain, less effort, more enjoyment, and more opportunities being the primary drivers. Does your innovation ease someone's hardships? Replace a workaround? Save money or time? Open a new world of possibilities? Help them get more out of fulfilling activities? If the answer is “no,” the market won’t care enough about the product for the business to thrive.

2. Unclear or absent differentiation in the market.

Here, the founder has identified a need in the market that buyers are willing to pay for, but their product or service doesn't stand out to buyers in the marketplace. Since young companies rarely have the budget to outspend their competitors on marketing, their product—as great as it might be—blends in with the rest of the pack. What makes your version different? More importantly, what makes it better? The entrepreneur isn’t just trying to get people to consider her product; she’s also trying to get customers to fire their old product. Maybe it’s the buyer’s old cup of coffee, accountant, or car-sharing service. It’s the founder’s job to figure out how to get prospects to switch, which is always risky for buyers. Entrepreneurs must find ways for their innovations to outweigh that risk with a value people will trust or sample without fully contacting the benefits first. This is difficult, often navigated poorly, and a common reason businesses fail.

3. Lack of feasible go-to-market strategy.

Assuming the business has overcome the most common issues—failure to investigate and unclear differentiation—it’s time to start selling. At this stage, failed companies tend to come in three varieties.

First, they have no go-to-market plan. They don’t have a documented plan for communicating their unique value and nurturing prospects to the point of considering a purchase. Initial sales are flukes supported by friends, family, or their network, and they might be non-scalable and non-productized versions of the offering. But hey, it’s early, and a sale is a sale! Initially, founders should undoubtedly do things that don’t scale, and they should spend more time ensuring early customers are supported and listened to, revealing meaningful and sustainable business value.

Second, founders have a go-to-market strategy, but it’s not feasible. Recruiting influencers or running a Super Bowl ad isn’t for every new business. Neither is hiring a high-powered B2B sales executive or running up low-return social media advertising bills. Fortunately, some simple methods can help any entrepreneur create, test, and adjust go-to-market plans that are attainable and reversible.

Third, new businesses run out of money before they can start selling. This is painful; business owners spend all their savings or investments on their products. They might have overbuilt for an imaginary buyer, failed to validate the product in the market, resisted adjustments, or trusted entirely in their convictions. These businesses might have a nice office, premium agency branding, and complete product feature sets… but no customers. Before anybody shows up to buy the product, the business has run out of capital, and the business is unsure if the world would have ever cared about its solution to whatever problem initially spurred the LLC registration.

4. Lack of community and strategic partnership.

Being an entrepreneur is exciting but can be very lonely. When we hear from founders that “life got in the way” of running their business, it’s often the case that they were alone and could no longer have such an isolating work life. For many solopreneurs, their friends and family are tired of hearing about their latest rollercoaster ride that is a part of startup life. Eventually, founders shy away from sharing even their successes with others as they know they could be telling a different story by the end of the day. Meetups and startup groups are a nice alternative to the sometimes solitary business owner life, but we believe founders and growing business leaders need ongoing connections with people who care about their success. This has always been challenging and even harder to find in today’s virtual culture.