Why do Startups fail in Tunisia?

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Tunisia: MENA Startup Hub

Have you ever wondered why someone who is very passionate about his or her work, who has both needed physical and intellectual capacities and above all, is filled with determination, patience and necessary skills to succeed in his/her business, yet fails?

The good part of the story is that despite the Tunisian instable economy and the growing number of unemployed universities’ graduates, Tunisian youth never seem to give up. Creativity and innovation are the weapons they chose to use in order to solve both dreadful social and economic situations of the country. The number of startups started to constantly increase then and Tunisia is even expected to become an important Startup hub in the MENA region. The sad part is that, unexpectedly, only few of these freshly-created businesses have survived.

What could be the reasons behind startups failure?

The main and most obvious reason behind a startup or any business failure is that there is no market for the product the company is offering. That does by no mean imply that you are not doing a good job. It may simply be a matter of culture or need. Let’s take a random example. In Asia, mainly in China, Korea or Japan, chopsticks are sold everywhere. Everyone uses them to eat at home, at restaurants, fast-foods, or even at picnics. It’s part of their culture, history and heritage. Now, imagine an entrepreneur creating a business in Tunisia, and starting to sell chopsticks. You may think: well, there are many people out there who are into Asian traditions and are very much interested in the Asian ways of doing things. These people may need to buy chopsticks to eat sushi obviously! But how many are they, and how many times a week (or a month) do they actually buy them? Let’s face it: the number of Tunisians who would purchase the product is not only very restricted but the purchase frequency is very low. Apart from the fact that the minimum profit would be hard to make as chopsticks are very cheap. In a similar situation, chances that the business fails are indeed very high.

Another reason behind companies’ nonperformance may simply be the lack of Uniqueness. Working in the business world is pretty much similar to living into the wild. Rule number 1: Kill or be killed. To translate into a business context: do not be like everyone else in the market, otherwise no one would pay attention to you, and you will be literally ostracized. Many startups may have an excellent idea behind their creation, but unfortunately end up being very similar to many other in the market, and that doesn’t help at all.

A third important reason that should be taken into consideration is not being “approachable” by customers and not to seek their feedbacks. Customers need you to be flexible and to listen to their preferences. You may be running a very interesting and profitable business, however, your target users need you to change or remove a very small detail to be fully satisfied, and thus to purchase your product twice or three times more than they currently do. A two-way communication is a culture that must be established and be associated to your business and company. As a matter of fact, not paying attention to customer’s preferences may cost a lot, and sometimes even put an end to a supposed-to-succeed business.

The choice of the wrong team members would also create disharmony and complications in the long run. Building a business is no different from building a house. Choosing carefully your material and putting a clear plan of what is needed to frame a solid construction is critical. You team members are the pillars of your to-be-built company. Therefore, it is indeed very important to gather a number of smart, skilled and motivated human beings to work with you on developing your startup, but make sure they love what they are doing and they believe in you, your idea and in the success of the enterprise. It’s all about being surrounded by positive and perseverant people. Keep that in mind!

Last but not least, the biggest obstacle that many Tunisians face when creating their startups is the scarcity of financial resources. Unfortunately, in some cases, it is hard for young entrepreneurs to get the minimum of money they actually need to turn their business ideas into real corporations. It is also not always easy to find and convince investors. Sometimes, even if it works at the beginning, some startups get stuck in the middle of the journey, run out of cash, and find no savior!

 

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