Entrepreneur · Startups

What is the #1 reason why entrepreneurs fail?

Manoj Sahoo Lean Six Sigma Black Belt Project Manager at Freelancing (Self Employed)

September 25th, 2016

This thread could save a ton of headaches, sweat, and tears. Thanks for participating.

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Jeffrey Gross Managing Member of intellectual property firm, Entrepreneur, P/T Musician

September 25th, 2016

I don't think I could come up w/ ONE top reason. But I can come up w/ three, at least as a reflection of what I've seen. 
1) Bad idea. (Idea could be bad in itself, or simply mistimed.)
2) Bad execution. (Many permutations: You hired the wrong people. Your marketing failed to reach potential buyers. Etc.)
3) Undercapitalization. 

James Bailey President at ABC LED Inc.

September 25th, 2016

No business plan with a realistic budget and funds to do it with.
Not willing to work the hours it takes to get a start company running.

Arthur Lipper Chairman of British Far East Holdings Ltd.

September 25th, 2016

The #1 reason for entrepreneurship failures to raise sufficient capital is the lack of realistic and vetted planning. They fail to define success and indicate a clear way of achieving it.

Dimitry Rotstein Founder at Miranor

September 25th, 2016

Here's my take on this question:
A startup's life can be separated into 3 stages, each having its own primary reason for failure:
1. Idea stage (from conception to go-to-market) - the main reason for failure at this stage is the team breakup (which can have many reasons in its turn)
2. Product stage (from go-to-market to product-market-fit) - the main reason for failure, simply put, is when you discover that you've built something no one wants (or at least not enough people want bad enough to pay for it or even use it for free)
3. Growth stage - the most common reason for failure is premature scaling, building the company too large to sustain with revenues, i.e. the growth is slower than expected and eventually you run out of money and investors don't want to invest more.

Tanya Prive

September 25th, 2016

Failure is achieved only when one gives up. Therefore the number one cause is because someone threw the towel in. Other secondary reasons are lack of product market fit, no financing etc

Steve Owens

September 25th, 2016

Believing that all you need is a good idea. 

Rod Abbamonte Co Founder at STARTREK / @startupHunter / @startupWay / @CoFounderFound / @GOcapital / @startupClub / @lastminute

September 25th, 2016

There is no #1 reason neither one unique reason but a group of reasons working together.

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

September 25th, 2016

Falling in love with building a product or service that no one wants to buy or, to put it more formally, "no market need". Here's a list of 19 more reasons startups fail.

Arthur Lipper Chairman of British Far East Holdings Ltd.

September 25th, 2016

Inadequate planning and resource to achieve realistic and well defined objective.

Mike Moyer

September 26th, 2016


The final version of the paper with those analyses is Hellmann, T. & N. Wasserman (2016) The first deal: The division of founder equity in new ventures. Management Science.

Noam Wasserman wrote a forward to my new book, The Slicing Pie Handbook, which launch on Amazon last week.

Noam's book, The Founder's Dilemmas is an excellent read that covers the topic of this FD string in detail.

Another book that addresses similar concerns is called Dead On Arrival, by Roger Royse (a Slicing Pie lawyer in San Francisco.