Strategy · Leadership

The main reason why startups fail?

Nishant Dogra UI/UX Designer at Blog Sparks Network, Inc

October 24th, 2016

If you want your startup to succeed, as the leader, you must be naturally passionate about the market you’re in, the ideas you pursue, the people you hire, the way you communicate, the office you design, the plans you execute, and most importantly, the things you do in your business minute to minute. The real question comes from the people you hire as you continue to grow the business and the culture that you establish. With this in mind, how do you measure the passion of potential new employees towards the problem that your company is solving? There is no doubt in my mind that the people who are driven by natural passion - become much better at doing those things than the people who are doing them for the wrong reasons and for that I find it critical to know who is really passionate about the company‘s vision. What are your thoughts on the collective lack of passion as the key driver behind startup failure?

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 24th, 2016

Forgive me but I think passion is irrelevant. Start-ups fail because their founders lack competence, funding or both. I worked for a company where the boss was so bad I could not stand gong to work. I still did my job well because that is the only way I knew how to do it. If the founder knows what is required and knows how to manage people to perform the tasks that are required then there is a chance that the business will succeed. Passion will not substitute if the founder does not know how to run the business.  Nor will passion suffice if the company lacks the funds that it needs.  We used to conjure up the image of the "cold" "hard" "efficient" businessman.  It still works.

John Barley Insurance Broker | Risk Management Expert | Organisational Health Coach

October 24th, 2016

Passion is one factor amongst many . But it is passion that drives the energy required to keep going when things get rough. If as an owner founder or otherwise exhausts all other avenues to keep a business going -. What's left with out belief and passion for what is wanting to be achieved?

 There have been many stories about people who have tried many different ways of doing things and have finally succeeded when others have given up months before hand . As Edison said to a journalist  - every time his invention did not work he learned what does not work and therefore created another option. passion drives the energy to create and re create options and be prepared to go on a journey.

Usually by taking the journey and exploring many options one finds a totally different solution to what they had originally  thought . Examples Apple Computers , Walt Disney- When he created Snow White he was almost totally broke and the banks were going to close on him. But because of his passion his determination his energy we now have the Disney empire.    

John Barley Insurance Broker | Risk Management Expert | Organisational Health Coach

October 24th, 2016

Irwin . Its always interesting to get another persons perspective. I agree that sometimes the business owner has no idea of what they are doing. However I do believe that if the purpose is true and honest and is for the greater good then the business owner will and should- could- may listen to reason and maybe should stand back and allow another to take on the roles of responsibility of driving the company forward. If you worked for the guy but could not stand him then why work for him?. At the end of the day your values were not aligned with his and this is such a frustrating stressful situation to be in for all parties concerned . There are two books that I have just read and I would suggest that entrepreneurs,business people should read them not for the story line but the undercurrent of messages most beneficial in understanding factors that affect all people and entities." Failure is not an Option" by Gene Kranz and "Leading People Safely" by James Schultz and Brian Fielkow. Brian's book deals specifically with this point and how to engage with people for the overall success of the business.

Finally without Passion, without a sense of purpose to drive the energy within what happens to any business when times get tough and they will. The CEO and his people at all levels need to function as a team and believe in the reasons for being there.

Ema Chuku Product Developer. Founder @ Ridit

October 24th, 2016

@Irwin Safe to say "Passion" is relevant and very important. I think the right scenario in your case would be "Lack of management" skills of the founder.

Startups fail for 3 main reasons in my opinion:. Finance. Creativity. Passion. Most in all if there's no passion it's likely to fail 3x the rate it would take if it was just "finance" or "know-how" reasons.




Michael Banks Coach Michael

October 24th, 2016

Certainly Nishant a collective lack of passion would kill most start ups in my view. In the one I was involved in recently that never got off the ground it was not because of a lack of passion. Everyone involved was really excited about the company and it's purpose. In our case it failed for other reasons like of funding and the ego of the COO! egos need to be left at the door to successfully develop a start up. And if funding isn't sufficient well it's extremely hard to boot strap for ever to traction. And, as I'm sure you know, it can take quite a while to monetize what you're doing. All that said, as someone who has been paid very well for decades to quickly and accurately assess current and future potential, the key is to identify who should be brought on board and who is to be avoided. My friend Vishnu is a force of nature who started his start up two years ago is really growing his company well. The first time I met him I could see the fire in his eyes, feel his energy and excitement, and knew he had that passion in spades.

John Barley Insurance Broker | Risk Management Expert | Organisational Health Coach

October 24th, 2016

Passion is critical. Belief in purpose as CEO and the business is also a corner stone . However the most important aspect that is never discussed is the engagement of the people (not staff or employees) Its your people in your community that you need to convince to follow you and believe you. Using the term staff and employees is an ego trip to provide statistical measurement of the supposed success of the entity. Your business is not a business with out people . Your customers are people . Your suppliers are people. So what are the values of you and how do you transport that to your brand. If people don't have the same values as the ceo and they don't understand the purpose of the business or how their personal purpose fits into the direction of the business then it is going to possibly fail . 

MaxBlox/Founder Institute Director, Chennai Area at The Founder Institute

October 24th, 2016

Passion is important, but it really probably matters for the core founding team. As Irwin mentioned there are a hundred other factors that matter and most matter more than passion. I dont think it is reasonable to believe that the 21 search engines companies before Google, failed because they didnt have passion.
I think sometimes people use this to blame people around them for the failure of the company, rather than prepare for ALL factors that could make you fail.

Dustin Wilkinson Professional Dreamer, Coma Survivor, Project Perfect Dayz Producer, Good Hearts Army Builder

October 24th, 2016

Thank You 

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 24th, 2016

John: I am a lawyer. I never had to like the people who hired me.  I sold my services. I worked to make money. Lawyers develop a thick skin. When two lawyers go into a court room someone loses, every time.  Winning in court or with a company is its own reward.  It does not take passion to be competent and to succeed. The question was what makes business fail. Incompetence will continue to be my answer. I was passionate about many things in my life, but my work, never. Did not stop me from doing it very well. Did not stop me from working 80 hour weeks if that is what it took.  Give me people who do their job very well. If you have to psyche yourself up to act professionally, then you are not a professional.  Its funny that younger people never see the world my way while large companies pay me well for the same advice. 

Candice Ifill Graphic Designer, Web Architect

October 24th, 2016

Passion is important it is the fuel that gives you power to make your business succeed but what is power without steering or direction. Many startups fail because they are consumed by passion without vision. The vision to recognize and seize opportunities. The vision to be flexible enough that if one avenue or industry fails then another is pursued. Lots of people think that they know everything and that if they are passionate about something's it will happen. But what if it doesn't? What if it changes? Entrepreneurs have to be flexible so that they take their passion with them no matter where opportunity brings them.