Digital Marketing Hacks

Why do Majority of Start Ups Fail

Why do Majority of Start Ups Fail? How to be the Minority?

I was busy typing away on another piece of article for this SEO blog in Starbucks and I overheard a couple of start up founders getting into a heated argument/ debate on cash flow, outsourcing ideas and business strategies on their start up. They were attempting start a food delivery service, focusing on hawker fare in Singapore.

They had one huge issue: cash flow issues. The founders were also young and they would be what you call them: millennials.

I got nothing against millennial, I also got nothing against ‘techy start up founders’. I admire the entrepreneurial spirit, however, I think the majority of ‘tech reliant start ups’ in is going to: fail.

Why do Start Ups Fail? Thoughts on Majority of Start Ups

I’ve spoken to a couple of tech based start up founders. These founders often have complicated business models and products. There’s saying that if you can’t explain what a business does in a sentence to a three-year-old, you’re better off not investing in one.

How many ‘tech start ups’ actually become powerhouses like Carousel? How many ‘tech start ups’ can be Uber, Instagram or Facebook? One in a billion.

I’d like to paraphrase that and say: if you can’t explain what your business does in a sentence to a three-year-old, you’re better off not starting one.

When people ask me what I do as an SEO consultant, I say: I help companies get leads through Google.

Simple, short and understandable.

I have nothing against innovation. In fact, I’m all for innovation. I’m a Science geek. However, what I’m saying is: your product or service has to sell. There’s also a lot of dirty, leg work involved.

There’s no point in setting up office, purchasing office equipment such as printers, registering your business, purchasing a website, writing loads of content if your product doesn’t sell consistently.

I once started a business in the dating coaching niche in Singapore. I started a business attempting to provide a service by teaching men in Singapore on how to go to bars or clubs to meet women.

It sounded like a great idea. You may even argue: sex is a primary desire. However, was there really any real demand? Is learning about dating a primary desire in itself? No.

On the other hand, if you took something dry and boring like SEO, SEO is readily demanded by almost every business/

Idea Validation

You don’t have to reinvent the wheel.

Why do Majority of Start Ups Fail 02

Let’s look at the Japanese food market in Singapore. Look at the number of Japanese food brands in Singapore. It started off with Sakae Sushi dominating the market. Now, you have dozens of other brands competing. Is Sakae Sushi worst off when they started? Perhaps. However, are they still generating tons of cash?


That was because there was already a market to begin with.

Your business idea has to have a market and your idea has to be validated. One of the best ways to research and validate your idea this is to look at what people are searching for on Google, using the keyword research tools such as the Google keyword planner. I teach this in my SEO course.

The second best way to validate your idea is to pitch the product or service even before building the product or service. Instead of wasting months and months of creating your company, why not pitch to potential customers, see if there’s a demand, and even secure the contract for it first?

This is a concept called: front loading.

Here’s my take: the majority of start up founders are focusing on shiny objects. It’s fun to be called a start up founder. It’s fun to name yourself CEO. It’s not fun to actually build a product or service that actually sells.

Unlike 98% of people in the tech world, I have zero interest in blockchain, fintech and bitcoin. These terms and concepts paint an unrealistic picture of actual businesses that provide dry boring services that’s actually demanded.

When I say I help businesses rank their websites on Google, people look at me as if I am an IT geek. Nothing against IT geeks, however, some times, it just isn’t cool at all. However, you know what beast being cool? It pays. It also pays consistently.

The Model I Prefer: Old Models, New Marketing

There’s something I learnt from my father, who runs a humble fish stall in the wet market in the east of Singapore. It’s the power of conventional business models. If there weren’t any wet markets, there would be thousands of households that went without grocery in Singapore. Food is a primary need.

However, the majority of these start ups aren’t addressing a primary need. Their business models are too fanciful, their founders splash me with complex terms that I (and the majority) don’t understand. Furthermore, they are always talking about funding through VCs or Serie A and etc. When your business is focused on funding as opposed to the service or product itself, let’s just say it isn’t really a profitable business.

You may say: Marcus, you’re such a hypocrite. Your company falls in the category of ‘tech start ups’ right? Isn’t web design or digital marketing ‘tech’?

Nope. SEO is just another conventional digital marketing strategy. There’s no fanciful ‘tech’ or special technology to obsess over. There are many other conventional marketing strategies such as Facebook marketing and email marketing that isn’t ‘tech’ as well.

Here’s what I prefer: combining old models with new marketing.

When I built my father’s wet market business a website using Weebly when I was 21. He received a call from a restaurant from Marina Bay Sands to take a huge order that he eventually couldn’t fulfill. That’s the power of combining old models with better forms of marketing. The seafood and fish retail business is already a proven business model with thousands of households as paying clients and… what if I took it online?

Personal Mistakes

I made the mistake for starting entering the relationship coaching market that has little or no demand in Singapore. I spent 6 months planning out my content, purchasing the themes, writing copy and invested huge emotional efforts into marketing the business.

I’ve also seen start ups that my friends started struggling to make money from a sustainable model. They find themselves pivoting to side projects and side ventures whilst not making the original product or service from the company work!

I’d rather you’d take proven products and ideas: and re-invigorate them with laser targeted marketing methods such as: SEO, Facebook ads and etc.

Lastly, I’m not saying that all of the start ups are going to fail. What I’m saying that if you’re looking to start your business, you need to find paying customers.

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