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The Top 12 Reasons Start-ups Fail

Updated: Dec 14, 2022

Running a business is the greatest self improvement exercise you can ever go on.

In my 25+ years career, I have been a professional manager, freelancer and co-founder of startups. The toughest among all, in my experience, is that of a startup founder.


Most of the time, you would feel uncertain, lonely and resource constrained : financial, talents, time, etc. Everything takes much longer (than expected) to develop. There are too many (quick) decisions you have to make: Who to choose as partners? Who are the core customer base? What technology to use? What kind of team to build? What strategic directions to go? Where to play? How to play? WHO/WHAT/HOW? Even for those who have survived to become multi-million-dollar revenue companies, they would face new challenges of "too big to be small, too small to be big" kind of growth bottleneck or plateau.


In this research report, CB Insights answers the question "Why Start-ups Fail?" after going through over 110 startup failure post-mortems, and breaks down the top 12 reasons. It's actually a great year-end check list worth sharing. Below list are the highlights:


#12 Burned-out/Lacked Passion

#11 Pivot Gone Bad

#10 Disharmony among Team/Investors

#9 Poor Product

#8 Product Mistimed

#7 Not the Right Team

#6 Pricing/Cost Issues

#5 Regulatory/Legal Challenges

#4 Flawed Business Model

#3 Got Outcompeted

#2 No Market Need

#1 Ran out of Cash/Failed to Raise New Capital


Here's a funny meme found online:


Guy in white shorts = VC-backed startup

Guy in black shorts = bootstrapped, revenue-funded startup


Successful entrepreneurs don't take blind risks. If you are struggling with whether you should go on an entrepreneurial journey, here are some simple questions for you to evaluate quickly:

  • What will be my biggest loss?

  • What's the worst that could happen?

  • Can I deal with the worst?


If the answer to the last question is YES, just go with what your heart tells you!

 

About the Authors

You can find me on LinkedIn: Jennifer He.


About VOYO

VOYO is uniquely positioned in English and Chinese-speaking markets across Canada and abroad. We are design and innovation driven marketers and business strategists helping organizations grow into more sophisticated brands, whether you are a small business who cannot afford a full-blown marketing and strategy department or a big organization who needs extra help.


Our service lines include 1)Business Design Projects & Workshops; 2) Marketing Services; 3) Unlocking China.


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