2019
The Top 20 Reasons
Startups Fail
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The Top 20 Reasons Startups Fail
Table of Contents
#20: FAILURE TO PIVOT
6
#19: BURNOUT
8
#18: DIDN’T USE NETWORK
10
#17: LEGAL CHALLENGES
11
#16: NO FINANCING / INVESTOR INTEREST
13
#15: FAILED GEOGRAPHICAL EXPANSION
15
#14: LACK PASSION
17
#13: PIVOT GONE BAD
19
#12: DISHARMONY AMONG TEAM / INVESTORS
21
#11: LOSE FOCUS
23
#10: PRODUCT MISTIMED
25
#9: IGNORE CUSTOMERS
27
#8: POOR MARKETING
28
#7: PRODUCT WITHOUT A BUSINESS MODEL
29
#6: USER UN-FRIENDLY PRODUCT
31
#5: PRICING / COST ISSUES
32
#4: GET OUTCOMPETED
34
#3: NOT THE RIGHT TEAM
36
#2: RAN OUT OF CASH
38
#1: NO MARKET NEED
40
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The Top 20 Reasons Startups Fail
After we compiled our list of startup failure post-mortems, one of
the most frequent requests we got was to use these posts to figure
out the main reasons startups failed.
Startups, corporations, investors, economic development folks,
academics, and journalists all wanted some insight into the question:
“WHAT ARE THE REASONS STARTUPS FAIL?”
So we gave those post-mortems the CB Insights’ data treatment
to see if we could answer this question.
After reading through every single of the 101 postmortems, we’ve
learned there is rarely one reason for a single startup’s failure.
However, we did begin to see a pattern to these stories.
And so after sifting through the post-mortems, we identified the
top 20 reasons startups failed.
Since many startups offered multiple reasons for their failure,
you’ll see the chart highlighting the top 20 reasons doesn’t add up
to 100% (it far exceeds it).
Following the chart is an explanation of each reason and relevant
examples from the postmortems.
From lack of pro