8 Reasons Why So Many Internet Startups Fail and How to Avoid?

Every day, millions of people drag themselves out of bed, shower, grab a cup of coffee, and head to their jobs, dreaming of an easier way to make a living. Many of them know someone who has left the traditional workforce and is successfully working from home on their personal computer. The idea of working from home is incredibly appealing to these dissatisfied workers. Unfortunately, many will quit their jobs and dive into internet marketing without preparation, knowledge, or education, setting themselves up for failure. According to numerous sources, more than 90% of all internet startups fail within the first 120 days.

Misconceptions About Internet Businesses

This staggering failure rate is a cautionary tale for those considering an internet business. And, here are some of the important reasons why internet-based businesses fail.

1. Working from Home is Easy

Many people believe that working from home will be easy and that they can set their own hours, avoid the grind of commuting, and make a good living with minimal effort. This misconception is one of the primary reasons so many internet startups fail. Success in internet marketing, like any business, requires hard work, discipline, and long hours. Established internet marketers who now enjoy flexible schedules have earned this privilege through years of hard work.

Structured Chores

2. Instant Success and Wealth

Another common misconception is the belief that an internet business can generate quick and significant profits. Many hopeful entrepreneurs expect to get rich quickly, but this expectation is not only unrealistic but also dangerous. The internet is rife with scams preying on those looking for a fast route to wealth. Success in internet marketing is possible, but it requires a realistic understanding of the time and effort involved.

3. No Business Background

Running a successful business, whether online or offline, requires a solid understanding of basic business principles. Many internet entrepreneurs lack this fundamental knowledge. They do not understand the importance of concepts like overhead expenses, profit and loss, and cash flow management. While a college degree in business is not essential, basic business knowledge is crucial. Without it, aspiring entrepreneurs are likely to make costly mistakes that could have been avoided with proper education or advice.

4. The Importance of a Business Plan

Many new internet entrepreneurs fail to develop a comprehensive business plan. A business plan outlines the steps necessary to achieve success, including realistic cost estimates and strategies for growth. Without a clear plan, many startups are doomed from the start. As the saying goes, “Those who fail to plan, plan to fail.”

Business Plan

5. Insufficient Capital

One of the most common reasons for startup failure is inadequate funding. Launching an internet business requires capital not only for the initial setup but also to sustain the business during the early months when profits may be minimal or nonexistent. Entrepreneurs must ensure they have enough resources to cover both business and personal expenses until the business becomes profitable.

6. Misunderstanding Profitability

Many new internet entrepreneurs do not realize that making a profit can take many months or even years. They often lack the patience and financial resources to sustain their business during this critical period. Understanding the financial realities of running a business is essential for long-term success.

7. Lack of Discipline

Running an internet business requires discipline and a strong work ethic. Many people fail because they believe they can work whenever they feel like it. In reality, successful entrepreneurs often work long hours and maintain a strict schedule to ensure their business thrives.

8. Ignoring the Need for Continuous Effort

Successful internet marketers know that their businesses do not run on autopilot. Continuous effort, innovation, and adaptation are necessary to stay ahead in a competitive market. New entrepreneurs often underestimate the ongoing work required to maintain and grow their business.


How to Avoid Failure?

So, if you are determined to establish an online empire, here are the things you should do.

  • Develop a Solid Business Plan – Before launching an internet business, develop a detailed business plan. Outline the steps needed to achieve your goals, including realistic cost estimates and timelines. This plan will serve as a roadmap to guide your efforts and keep you focused on your objectives.
  • Be Prepared to Work Hard – Expect to put in long hours and hard work. Success rarely comes easily, and perseverance is key. Be prepared to face challenges and setbacks, and be willing to put in the effort required to overcome them.
  • Avoid Get-Rich-Quick Schemes – Be wary of schemes promising quick and easy wealth. These are often scams designed to take advantage of hopeful entrepreneurs. Focus on building a sustainable business through hard work and sound business practices.
Work Life Balance


The high failure rate of internet startups can be attributed to misconceptions about the ease of working from home, lack of business knowledge, financial mismanagement, and unrealistic expectations. By understanding these pitfalls and preparing adequately, aspiring entrepreneurs can increase their chances of success. Remember, success in any business requires planning, discipline, hard work, and patience. Join the 10% who succeed by approaching your internet startup with the right mindset and a solid plan.