Why Most Start Ups Fail?

There’s an unwritten rule that 90% of all start ups fail. That’s a huge number and there’s a lot of reasons for it. Saar Gur’s Slideshare presentation will guide you through a great list of reasons for failure at acquiring new customers.

Steve Tobak’s ‘9 Reasons Why Most Startups Fail’ will also give you a list of reasons.

But have you ever thought what’s the core reason for start ups failure?

In short: Because it’s based on its co-founders ideas

You’ll have to validate it going through a long process of conversations with customers, pivoting and wasting valuable time to reach to a point where you make a conclusion like: actually my idea wasn’t so good.

Next thing: Think about growing a successful start up from a different perspective.

Even with the evergreen markets, if your ultimate goal is not to solve a real market problem or stop real pains, you are wasting your time, your team mates’ time and your customers’ time and in some cases – investor’s money.

Watch out here!

Trying to figure out where’s the pain will often lead you to an idea what you could create to stop this pain, save your customers X amount of money and Y amount of time every month and every year.

A start up company that first focused on conversations with customers to find out what are the biggest market pain(s) it could solve is far more likely to become successful than a start up company starting with someone’s idea or a big dream.

But there’s pivoting to direct me to the right path – yes, and if you are going to pivot, try to make it as effective as possible to avoid any possible blind issues with your first market assumptions.

I’ve seen a lot of good examples which didn’t have:

– an idea

– a logo

– a site

– even a product or a service

Then, what process have they used to create a business around paying customers?

The 7 steps of wisdom

  1. They focused efforts and time to talk to potential customers
  2. found a real pains
  3. started digging deeper and deeper to reach the ones for which people have actively searched for solutions and for which people are ready to pay
  4. made a scratch of a solution with their help
  5. received X amount of money from them to develop the solution with programmers
  6. made a working version of their product and launched first version
  7. then invested X% of the monthly profits in developing until they’ve achieved a product ready to be marketed more broadly and grew further attracting more customers and scaling to wider markets.

The steps above collects all important milestones of product and customer development.

Again: What’s the 90% Valid Reason Why Most Start Ups Fail

Because co-founders fall in love with their ideas.

The good thing is sooner or later you realize that when you’ve failed, you are in a better position to succeed with your next start up.

Because “Success is stumbling from failure to failure with no loss of enthusiasm.” said Winston Churchill.

No need to believe me, believe what these people did.

But that’s not everything and leaving your original idea is not the only exit. Since, you’ve started with an your original idea, you still have an option to save at least big piece of it. If you are ready for it you can also change your idea, you can always pivot.

Here’s a great and short lesson upon this subject from Ash Maurya, the author of Running lean. Make sure you watch the 13 m. video and please don’t underestimate any resources successful start up dogs have recommended  you.


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