What Kills Startups? A study.

"Herrmann said that the team’s research found that of the 90 percent of startups that fail, 70 percent scaled prematurely"<p>They must have had a strangely biased sample. Since the Bubble (when it was common) I've seen few startups do that. What kills startups is making something users don't want.

Disclaimer: Purely anecdotal evidence ahead.<p>I've worked for two startups that failed and did consulting work for another one that idled lifelessly while the founder refused to admit defeat. In general, aside from having a clunky, ugly product that didn't really solve a genuine problem, I also noticed another trend:<p>The founders were too stubborn to recognize or listen to their users (if they had any). The word "pivot" was not in any of these founders' vocabulary. We'd look at the data, and see users not touching these new features we added and instead the founder(s) just shrugged and said, "No, the users just aren't using the product correctly".<p>No, you idiot. Your product sucks.<p>I, along with a few other employees tried in vain to convince the founders that we needed to stop adding useless features and start listening to the data, and the founders just decided to try to convince the users to use the app the "correct" way instead.<p>This, in turn, led to employees (and even co-founders) basically just giving up on trying to convince the founder/CEO of a need to pivot, so in essence the employees had already given up on the product. And when your employees (and cofounders, ffs) have given up on the product, you've already lost.<p>interesting read.

The study indicates premature scaling is the number one cause of startup failure. Y-Combinator's results seem to indicate the number one cause of failure among its startups is kind of the opposite: the startup just kind of peters out, and the founders go work on something else.<p>I assume this is a result of selection bias on both sides: Y Combinator only funds extremely small startups (generally 2-3 people), and this study likely (though I'm having trouble verifying) only includes startups that got beyond this phase. Does this sound reasonable?

It's an interesting study, no doubt. However I keep wondering if you can really judge a start-up's chance to succeed without taking the actual business idea/concept as well as the entrepreneur's personality into account. Since it's very hard to operationalize those, I do understand that you refrained from including it. I've just got the feeling that the quality of the business idea and the entrepreneur's traits might be a pretty powerful confounding variable for what you examine. Therefore it seems necessary to me that these variables are being controlled somehow. I'd like to illustrate that issue. You name premature scaling as the most important factor for start-ups to fail. While this conclusion might not be wrong on the one hand, it may be an illusion that the premature scaling is the actual reason for failure. As an example, premature scaling should be very likely to happen to a "megalomaniac" entrepreneur who just overestimates his business idea's chance to succeed or its growth rate by far. If megalomania is in place at that stage, one have to assume that it also was when the entrepreneur founded his business - by highly overestimating a crap idea who wouldn't have deserved to be turned into a business. In this case, the business' failure wouldn't have been caused by the premature scaling (although it seems to be since that's what you were looking at) but by the entrepreneur's tendency to overestimate the quality of his idea. That said the premature scaling is just another outcome of the true, underlying reason for failure - but not a reason itself. It's just an example, but it might show that it's risky to name your variables as crucial factors for failure as long as you don't control what the business is based on in the first instance: the business idea and the entrepreneur's personality. What are your thoughts on that?

Warning: I filled out 80% of this, stopped for a call then hit the back button accidentally when I got back. All my input seems to be erased and I'm not spending another 20 minutes on filling it out again to find out what happens at the end. (I just submitted this bug to their uservoice).

"98% of startups fail because 98% of startups are unnecessary. They're trying to solve artificial problems." -Joey Pfeifer

Paul Graham's version on what kills startups: <a href="http://www.paulgraham.com/startupmistakes.html" rel="nofollow">http://www.paulgraham.com/startupmistakes.html</a>

Only the startups that solve real problems are able to survive. As a startup you should answer the following questions: 1. Would you use your own product? 2. Would you pay for it?<p>If the answer to both the questions is a BIG yes, then you have a solid product and a good chance to survive.

I think another major point that wasn't discussed in the post is that the startup world is a rocky one. You might be full of confidence in your idea one day, and then the next day you feel your idea is garbage. It's a roller-coaster ride, and not everyone can deal with that. Especially until you have users that are signing up for your service, it's really just your own personal opinion, you need validation in an idea to continue to give you the confidence to pursue it no matter what your opinion of it at the moment is

"A core feature is something that is required for your service to deliver value. For facebook a core feature is the ability to friend people. An email notification from facebook that someone sent you a message is a nice to have but not a core feature."<p>Is it a joke?<p>Without email notifications Facebook would never grow to any meaningful size (if at all).

I'd use this product if the company name was not a required field.