Why Do StartUps Fail?

Why Do StartUps Fail?

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.

Welcome Renonedo Williams

Welcome Renonedo Williams

CleanStart has a new face supporting the region’s Entrepreneurs.  Renonedo Williams is a CSU Sacramento Mechanical Engineering Student who is the newest intern at CleanStart.   He is entering his final semester at Sac State and is looking forward to connecting with as many clean tech startups as possible and understanding each of their value propositions, to connect his enthusiasm of building things to his goal of being his own boss. Renonedo has a background in design and material selection along with motor efficiency.

Some of Renonedo’s first goals are confirming the information from companies on the CleanStart Clean Tech Map, meeting the Startup Community, visiting clean tech businesses, and immersing himself in the region’s entrepreneurship culture.

We are able to bring Renonedo on as part of our partnership with the College of Engineering and Computer Science and BlueTech Valley.

Welcome New Partners

Welcome New Partners

Welcome to Two New Partners

CleanStart is pleased to announce Valley Vision and Tech Futures Group as it’s newest partners.  Together we will be working to promote entrepreneurship in the Region along with adoption of clean tech.

Valley Vision’s team has a long history of working with CleanStart and has been one of our big supporters behind the scenes. Our Partnership will connect startups with regional policy makers to deliver a healthy clean tech economy.

The Tech Futures Groups is part of the non-profit SBDC and provides advisory services to qualified startups, using their broad network of mentors.  We are looking forward to holding an event with them in the coming months to connect them with more of our cleantech community.

Welcome New Associates!

Welcome New Associates!

CleanStart would like to welcome Qidong Jia and Kate Newton as our newest Associates.  They will be working on blogs, company profiles and CleanStart Events!

Kate is a recent graduate of Cal Poly, San Luis Obispo and has a strong background in entrepreneurship and global politics. After helping launch an AgTech startup on the central coast, Kate is back in her hometown looking to take her experience into the world of Cleantech and help grow the Sacramento region.

Qidong recently graduated from UC San Diego and has a B.S. in Managerial Economics. His multicultural background helps companies approach problems from new perspective. He is also a fellow at Impact Venture Capital where his passion of understanding new technologies that could change the world helps both Impact and CleanStart make a difference. Check out his blog on Integrated Comfort.

 

We are excited that they both are working with us to make a difference in the region for CleanStart!

We would also like to thank Cameron Law, our last Associate, who has become the new Executive Director at Social Venture Partners in Sacramento. We look forward to continuing working with him as his career develops.

You can reach Qidong at <qidong@cleanstart.org> and Kate at <krnewton@cleanstart.org>.

Thomas Hall

ABOUT THE AUTHOR

Thomas is the Executive Director of CleanStart. Thomas has a strong background in supporting small businesses, leadership, financial management and is proficient in working with nonprofits. He has a BS in Finance and a BA in Economics from California State University, Chico. Thomas has a passion for sustainability and a commitment to supporting non-profits in the region.

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CleanStart PowerUp! Progress Report Release!

CleanStart PowerUp! Progress Report Release!

CleanStart Progress Report Launch Party was a Success!

Last week’s CleanStart Progress Report Launch was a success.  Companies from all over the area attend.  

John Bissell talked about Micromidas becoming Origin Materials. We learned more about the sustainable Origins 100% bio-based water bottle and how they can save the world from 50 million tons of non-renewable PET. Origin Materials is now creating an 80% bio-based bottle with Nestle and Danone and received $40 million in investment.

 

Mike Hart introduced all the things going on at Sierra Energy’s campus. From their FastOX Gasifier being built to bringing the makers space Area 52 to life.  Mike gave us a peek at some of the obstacles and intricate systems Sierra Energy has had to fit FastOX into as Sierra Energy completes its commercial scale plant in Fort Hunter Liggett in Monterey County.

 

Arya Rashid and Joe Nguyen from Tenkiv answered questions on how they leveraged crowdfunding to raise money and increase Tenkiv’s visibility around the world. Not only did Tenkiv raise $50,000, they brought their solution to the attention of people around the world. They shared their key to a successful crowdfunding event –planning, planning, and planning!

 

The 2017 CleanStart Progress Report was also in the SacBee and Sacramento Business Journal.

Look to learn more about crowdfunding at our upcoming workshop on June 20!!

ABOUT THE AUTHOR

Thomas is the Executive Director of CleanStart. Thomas has a strong background in supporting small businesses, leadership, financial management and is proficient in working with nonprofits. He has a BS in Finance and a BA in Economics from California State University, Chico. Thomas has a passion for sustainability and a commitment to supporting non-profits in the region.

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