Great insite from Bob Pritchard

We all know the success stories of Facebook, Airbnb, Twitter and Uber. 

In a detailed review of over 2000 startups financed with venture capital reveals that more than 95% of the startups fail to see return on investment. And 40% of US startups liquidate all assets, with investors losing all their money. 

Startups fail according to the study because the old management methods of a good plan, a solid strategy and thorough market research don’t work for startups, as they operate with too much uncertainty. An analysis shows us the top 20 reasons why startups fail.

• Insufficient market need . . . 42%
• Ran out of cash . . . . . . . . .    29%
• Poor management team . . . .23%
• Beaten by competitors . . . . . 19%
• Price/cost issues . . . . . . . . . .18%
• Poor product . . . . . . . . . . . . . 17%
• Poor/no Business model . . . .17%

• Poor marketing . . . . . . . . . . . 14%
• Ignore customers . . . .. . . . . .14%
• Product mistimed .  . . . . . . . .13%
• Lose focus . . . . .. . . . . . . . . . .13%
• Disharmony with investors . 13%
• Bad pivot . . . . . . . .. . . . . . . .10%
• Passion fades . . . . . . .  .. . . . .9%
• Poor location . . . . . . .  . . . . . .9%
• No investor interest . . . . . . .  8%
• Legal issues . . . . . . . . . . . . . . 8%
• Did not  use advisors . . . . . . .8%
• Burn out . . . . . . . . . . . . . . . . .8%
• Failure to pivot . . . . . . . . . . . .7%

There is seldom only one reason why start-ups fail, this is why the list exceeds 100% The main reason though why startups fail, is that the founders have a ‘big idea’ and come up with a so-called solution for something there is no market need.

A successful start-up needs three ingredients: 

The way to get things done is not to mind who gets the credit for doing them.