As the year goes by, dreams wear off, and reality hits. Hard. Only a third of startups make it to the 10-year mark, with every fifth failing during the first year.
At its core, a startup is a business experiment that tests assumptions that are obviously not always true. This explains why they are relatively more likely to fail and close. The more innovative the project, the more likely it is to fail.
The majority of business books focus on success stories. Otherwise, they wouldn’t have sold so well. But survivorship bias sometimes paints a picture too pretty to be true. What if, instead of success stories, we studied the stories of failure? In the frenzy of excitement, it’s easy to forget that in reality, the majority of startups crash-land in the first 3 years of their existence.
There are several reasons why startups fail:
- Lack of adequate marketing research
- Poor marketing
- Problems with pivoting
- User-hostile product
- Wrong team
- Disharmony within team
- Burn out
- Lack of funds
Creating a product that no one wants is a complete disaster. Do proper market research to find out if anyone is interested in your product. If your creation solves the problems of your potential customers, then it is more likely to be successful.
You should strive to build a balanced team, not recruit perfectionists. If you hire smart people that are unable to cooperate, they will most likely not be able to work effectively as a team with each other.
To learn how to avoid the most common mistakes startups make in their first year, head on to our updated article: