Analytic firm CB Insights just published its study of 101 failed startups to uncover why they didn’t make it.  It’s a revealing list. Here’s a summary of their Top Twenty Reason:

Reason

Percent

Reason

Percent

1.   No Market Need

42%

11.  Lost Focus

13%

2.   Ran Out of Cash

29%

12.  Disharmony Among Team/Investors

13%

3.   Not the Right Team

23%

13.  Pivot Went Poorly

10%

4.   Got Outcompeted

19%

14.  Lacked Passion

9%

5.   Pricing/Cost Issues

18%

15.  Failed Geographic Expansion

9%

6.   User Un-friendly Product

17%

16.  No Investor/Financing Interest

8%

7.   Product Without a Business Model

17%

17.  Legal Challenges

8%

8.   Poor Marketing

14%

18.  Didn’t Use network

8%

9.   Ignored Customers

14%

19.  Burn Out

8%

10. Product Mistimed

13%

20.  Failure to Pivot

7%

 

This is like a checklist of issues you should be sure to avoid.  It seems surprising that the top reason for failure was that there was no market need.  This really reinforces the need for startups to go out and interview customers to validate interest in their proposed product.  Apparently, doing so is not so common. 

Inability to raise money is not the problem (#16), but pricing the product unprofitably (#5) and running out of cash (#2) are bigger ones. 

There are a lot more details in the full 25-page report you can download here.  

If you want to learn quickly how to be a good startup CEO and avoid these problems, apply for our summer Crash Course to be held August 16, 23 and September 6.  You can find out more about our course here.

The course will provide you with an understanding of the key components necessary for drafting a business model. We will have concentrations in CEO fundamentals such as how to pitch an idea, the legalities of business, marketing, leadership, team building and more! By the end of the course, you will have developed concrete skills that will aid in advancing your venture.

Attendees will learn

  • essential knowledge and skills required to develop their ventures
  • individualized mentoring
  • benefit from networking opportunities to connect with other companies and domain experts
  • be provided with opportunities to publicize their companies and ideas

This kind of deal doesn’t come around often so act now! It is FREE but a limited number of seats are available!

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.


Contact Us

  • This field is for validation purposes and should be left unchanged.
Website developed by Ryan McBride for Ellington Marketing Solutions