“Ignore the hype of the startups that you see in the press.
Mostly it is a pack of lies. Half of these startups will be dead in a year.
So Focus on building your business, so you can be the one left Standing”
Jules Pieri (CEO of The Grommet)
Jules is very aware of one fact: majority of startups will not survive beyond a year. You read that right. Only a few will scale, and only very few will eventually become blue-chip companies. Not because they didn’t have a solid business or their ideas weren’t amazing. But because certain things were not put in place at the right time. What an untimely death!
Here are few postmortem statements from ex-founders as seen on Forbes
The founders of Standout Jobs wrote in their post-mortem,
“Sometimes failure was the result of not having the right people on board. “…
The founding team couldn’t build an MVP on its own.
That was a mistake. If the founding team can’t put out products on its own (or with a small amount of external
help from freelancers) they shouldn’t be founding a startup.”
In the same article, the founders of the failed Treehouse Logic, a visual configuration platform company, discovered.
“Startups fail when they are not solving a market problem…
We had great technology, great data on shopping behavior, great reputation as a thought leader,
great expertise, great advisors, etc, but what we didn’t have was technology
or business model that solved a pain point in a scalable way.”
The founder of GameLayers blamed its failure on this.
“Ultimately I believe PMOG lacked too much core game compulsion to drive enthusiastic mass adoption.”
He observed they needed to make something that was easier to have fun with, within the first few moments of interaction instead of getting caught up in more “abstruse” features. The lack of an MVP was a major reason for their failure.
We will leave you with what folks at eCrowds had to say.
The web content management system company admitted not prioritizing customer input, saying,
“We spent way too much time building it for ourselves and not getting feedback from prospects — it’s easy to get tunnel vision.”
VoterTide founders summed it up saying,
“It’s easy to get tricked into thinking your thing is cool. You have to pay attention to your customers and adapt to their needs.”
WHAT EXACTLY ARE THE REASONS WHY STARTUPS DIE?
From the postmortem statements of these founders, two critical factors that stood out were:
No MVP: Going all in and spending so much thinking the more the better. (Believing their product is very special) without understanding the market they are serving.
Inability to develop an early product for market testing and feedback: (No market validation) They were unable to solve the pain points of the customers.
The truth is many startups will die as Jules said, but what will keep a startup alive is to work with the right team, build an early product and find a product-fit for your target audience.