Why Most Silicon Valley Startups Fail and How Executive Coaching Can Help

Although Silicon Valley is known as a place with lots of power, money, and success, the truth is that over 90% of startups in the area fail. Competition in Silicon Valley is fierce, both for talent and market share, making it an increasingly challenging environment to succeed in, too.

So, why do so many companies fail? There are multiple reasons, but it usually comes down to neglecting a vital area of the business by not putting enough resources into it.

Fortunately, there is a solution for many failures that begin at the top of these startup companies through executive coaching services.

Here's a look at some of the main reasons why Silicon Valley startups fail, along with some information on how an Executive Coach in the Bay Area can help put the C-suite on the path to success.

Poor Financials

It should go without saying that most startups fail because they aren't bringing in enough money, but how does that happen?

First, many startups don't have a thorough enough financial plan that tracks exactly how much they're spending every month. You should break the financials down to provide clear information on how much your products cost to make and how much you're spending on other aspects of running your business.

It's also vital to know how much cash flow the company needs to break even and when it anticipates reaching that level.

It's easy to look at the company's bank balance and believe you're okay. Still, minor hiccups in production or slower than anticipated sales can quickly eat into your startup funds, leaving you without a safety net.

No Marketing Strategy

Another common mistake that startups make is believing that the product is strong enough that sales are sure to follow, even without a large-scale marketing campaign.

This point goes back to the fierce competition in Silicon Valley, as there are probably other startups in the area that are currently working on similar projects right now. How will you stand out?

The reality is that you need to be aggressive with your marketing approach to ensure potential customers can find you. Having a website isn't enough, so don't assume that people will buy your product just because it's available.

Bad Investors

Who are your investors? Are they looking to make a quick buck, or do they believe in what the company is doing?

If you have private investors, are they willing to partner with you as you grow, or will they bail at the first sign of trouble?

There are countless questions involved with investors, which is why intelligent startups thoroughly vet anyone who offers them money. Make sure these investors know it could be years before they see a return, so they don't end up pulling the plug before you really get started.

It doesn't matter how well you handle other aspects of the business; losing your investors will likely cause you to fail, so choose wisely.

Lack of Leadership

It might hurt to hear this, but you and the rest of the executive team could be responsible for the failure of your Silicon Valley startup.

As a leader, you're responsible for setting the company's culture and hiring a team that is genuinely committed to the startup reaching its goals. If you fail to develop this culture or don't surround yourself with the right people, collapse is imminent.

Fortunately, there is assistance available through an executive coaching program.

How Executive Coaching Can Help

Executive coaching can help you develop the leadership skills your startup needs to reach the next level. A solid program can assist as you learn the leadership versatility, communication skills, conflict competence, and influencing skills to ensure your organization thrives.

Professional executive coaching is an invaluable tool for all Silicon Valley startups. The team at the Leadership Development Institute will provide you with the tools required for your company to reach its goals.

Ken Mozlowski is Senior Project Manager with ACS Group providing web development and SEO Services to businesses of all types and sizes.