Why do so many startups fail?
There are many different reasons why startups or companies in general fail. In my experience, however, I think there is no one single cause, but a constellation of mistakes or misfortunes that once combined can be fatal. Common causes include: - hiring! having the right people on board is key, a wrong hire can ruin a company; - cash! many entrepreneurs fail to anticipate or generally underestimate the cash requirements of their business; - infrastructure! here I am referring to execution infrastructure which may be as basic as billing system, IT, policies etc. I my experience, most startups neglect this areas as they focus principally on bringing their products to market and hope to figure-out the rest later; - product! sometimes great product simply fail the test of simplicity and consumers or customers simply walk away; avoid complexity in product design;- governance! another aspect commonly ignored by startups. Co-founers, board and advisers are key to the success of any venture. Choose wisely. - leadership! another key success or failure factor is the leader; management style is important. How do you treat your employees? how do you communicate, motivate and chart the course?- customers! most startups create products without a market or a problem to solve, and then spend valuable time and resources looking for the problem. Listening to the needs of the customer / market is very important. In today's 'Lean Startup', it is possible to come to market quickly with simple Minimum Viable Product, and study what works, and what does not, obtain feedback and iterate like mad..