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How many startups fail? Way less than you think.

Given that my business deals with startups it's important for me to know how many startups don't make it.

After all, if most of my clients are destined to fail in several months then it doesn't make sense to work with them, right?!

The first time I searched for startup failure rate I was shocked to see that the number one result on Google claims that "90% of startups fail".

After doing some research, though, I learned that the actual number is way less.

So I just kept going, confident that my clients are there to stay.

Recently, though, I started getting this nagging feeling that I might not be the only one who was initially startled and probably discouraged by the "90%" myth.

So, after consulting with four reports on startup/business failure rate, I compiled a post that aims to dispel once and for all the grim and false myth.

I've also touched upon the two main reasons why startups fail - lack of proper research and not communicating effectively.

You can find the post here - https://www.tailoredcopywriting.com/startup-failure-rate/

Comments

  • dwk061000dwk061000 Posts: 11subscriber Bronze Level Member
    Hmm, I'd have to disagree - a lot of startups fail but I don't see "failure" as failing. Failure is just a way of learning...
    www.danstravelguide.com 
    Travel Well, For Less
    It's my pleasure to help people travel more and well for less. 
  • krasimirkrasimir Posts: 2subscriber Member
    Yes, a lot of them do. But not as much as 9 out of 10. Besides, "failure" is a stretchy term.
  • Ryan O'BlenessRyan O'Bleness Birmingham, Mich. Posts: 797administrator Site Admin
    edited September 18
    Failure is actually key to future success in a lot of cases. Several of the most well-known entrepreneurs have failed in past venures: Steve Jobs, Tim Ferris, Walt Disney, Bill Gates, George Steinbrenner, Richard Branson, etc. 

    However, I have also always questioned the "90 percent failure" narrative for startups. That just doesn't seem like a plausible scenario, and I am glad you were able to research this and come up with a more realistic answer, though it still seems rather high. 
    Ryan O'Bleness
    Community Moderator
    StartupNation, LLC
  • gambitgambit Posts: 27subscriber Bronze Level Member
    Some of the common reasons are:
    Idea Scalability: Lack of idea scalability is the topmost factor that can lead to a startup death. It happens when you move on without doing enough research.
    Lack of Focus: This is the common mistake made by all the growing websites that shut down sooner or later.
    Lack of Flexibility: One should be flexible enough to adapt to changing the atmosphere, instead of sticking to rigid concepts.
    Dependable Team: Ventures that fail usually have a chaotic team management that derails in tough times.t
    Running out of Cash
    No Market Need
  • Shohrat ShankarShohrat Shankar Posts: 14subscriber Bronze Level Member
    Yeah, lots of startups fails. But you know even they fail they have done more than there capabilities.
  • PZagottiPZagotti Houston, TXPosts: 13subscriber Bronze Level Member
    I must agree with Gambit.
    As a CPA I have business clients walk into my office who have inflicted aspirations of starting a business and most of the time have already started it or are very close to opening their doors.

    Generally, they have not done a business plan or SWAT analysis or a budget and most of the time they are not properly capitalized to withstand the 2 years plus that it takes the average startup to get a foot hold.

    I think that 9 out of 10 business fail or shut their doors within 5 years. I believe roughly 50% of all startups fail within 12 to 18 months.
    Phillip Zagotti
    Partner
    Zagotti & Burdette CPA, LLC
    ZnBcpa.com
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