31 January 2021, Sunday, 14:11 434

Sergey Kartashov (Sergejs Kartasovs) talks about reasons behind startups’ failure

Sergey Kartashov (Sergejs Kartasovs)

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Sergey Kartashov (Sergejs Kartasovs), the CEO of Generation Partners, shared his views on why did most of the startups fail in the first year. Generation Partners is a Cyprus-based company that deals with IT asset management. If an investor has a wide range of companies in its portfolio, then the job of asset managers become tough and labor-consuming. The CEO of Generation Partners noted some important aspects of expanding and marinating a profitable portfolio for an investor.

"As a rule, out of hundred projects, there are only a few that are worthy of investor attention,” said Sergey Kartashov. A lot of projects lose attention at the moment of the first glance as they do not have the ability to solve an active problem or they do not have uniqueness. The experts know which project has the legs to come through. “Almost 90% of the projects die during their first year. Out of the remaining 10%, half do not survive the next 5 years," he added.

There are various reasons behind the failure of startups including lack of funding, conflicts among the team members, lack of abilities, and monetization issues. “There are really a few projects that reach a payback,” said Sergey Kartashov. These are some common issues that make a startup weak over time and eventually become the cause of its death. An asset management expert knows how to calculate risks associated with a startup. It is easy for experts as most of the startups make some common mistakes.

The CEO of Generation Partners highlighted some common mistakes made by startups including lack of a project development strategy, lack of a business model, and weak management. The teams behind most of the startups think that they are have done enough to create an innovative product. However, the market conditions are tough due to the flow of information. Many creative, newest, and most innovative products get lost in this flow. In order to make a product successful, a startup should focus on its marketing by using analytical tools. Similarly, most of the startups do not have a proper business model. Investors pay no attention to the startups that do not have a business plan. Last but not least, many startups do not pay much attention to strengthening their management. There are various teams that work on the development of a new product including developers, lawyers, marketers, and many more.

Sergey Kartashov (Sergejs Kartasovs) shared some other problems as well including conflicts in the teams and lack of business experience. “There are conflicts in the team, and problems with founders who are inspired by their ideas but lack experience in business,” he added. The experts can find these problems very easily during the initial analysis of a product. Some investors help startups to complete their strategy by finding the right talent for them. They also invite people from other projects for startups that face issues related to strategy development. However, if key points are missing in a startup, then investors will let it go, according to CEO Generation Partners.

Sergey Kartashov shared some important aspects of his company as well. His company is based in Cyprus that is an ideal location for working with clients from both Eastern and Western Europe. It takes less than three hours to reach any country located in Europe from Cyprus. Moreover, the island has a well-developed community of IT developers. Similarly, it is a favorable place for relocating companies as it offers huge benefits to them.