Failure sucks. Startups are dying in numbers every year. Greater percentage of them shutdown and the founders move on to something else. The good thing is that most entrepreneurs don’t give up that easily. You can easily start a new business but maintaining it is where the real deal is. These reasons are common with failed startups or those that are about to die: we need more money, we need more traction, we need growth, we need to start making money or else…, we don’t have enough buzz, we have management issues and founders have lost interest in the idea.
Startups need to have the same kind of urgency to get things off and working as soon as possible, otherwise doomsday will be closer than they think. The money of your customers is the life-blood of your business. Not the money of investors. Not the money of your family or friends. Without paying customers, your startup starves, suffocates and eventually dies by suicide.
Justin Kan, the founder of Justin.tv and Socialcam, wrote an enlightening essay a few years ago about how startups don’t die, they commit suicide. In this essay, Justin gave an example of AirBnB founders Brian Chesky and Joe Gebbia, who tried to make AirBnB work for years. They racked up thousands of dollars of personal credit card debt. It wasn’t until they got into YCombinator and really focused on generating revenue and hitting profitability that they really started seeing product traction. Here is why greater percentage of startups are more likely to commit suicide.
- They lack product traction
- Many have plans with no visions
- No revenue model
- They get in the ring but can’t stay in it
This document is a collection of what went wrong with 50+ startups. Most of these reasons for failure were shared by the founders in various post mortem posts. Inspired by CB Insight’s Startup Failure Post-Mortems.
Over 50 Startup Founders Reveal Why Their Startups Failed
by Thomas Oppong (PDF) – 29 pages
