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Why Startups Fail


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Why do startups fail and what are the common pitfalls to avoid?

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Why Startups Fail

  1. 1. WHY STARTUPS FAIL Jon Gosier & Walid Al-Saqif TED FELLOWS RETREAT 2015
  3. 3. IT’S MATH.
  4. 4. “The default state of startups is failure.” - Chris Dixon
  5. 5. This is probably you.
  6. 6. This where most companies start.
  7. 7. This is how most companies see themselves.
  8. 8. Optimism (a.k.a Healthy Delusion)
  9. 9. Startups overwhelmingly fail for the following reasons:
  10. 10. 1. Run out of cash.
  11. 11. 2. Founder feuds
  12. 12. 3. ‘Super-Founder’ Syndrome Not trusting your team, failure to delegate responsibility. Hiring the wrong people (friends and family instead the right people for the job).
  13. 13. 4. Poor casting/hiring Hiring the wrong people (even without nepotism) can be disastrous. Its always harder to get rid of people than to bring them on.
  14. 14. 5. Unrealistic expectations The inability to deal with reality versus ambition.
  15. 15. 6. Dues ex machina Expectations of a “savior” to emerge and turn everything around. (ex. venture capitalists, new hire, acquisition etc.)
  16. 16. 7. Dues ex machina Expectations of a “savior”to emerge and turn everything around.
  17. 17. 8. Lack of discipline No/Poor planning. Not adhering to budget (ex. overspending). Not having a budget. No long term strategy.
  18. 18. 9. Undercapitalized This usually means you’re trying to accomplish too much with too little (foolish optimism) , or you’ve taken less money than you needed to begin with (poor planning).
  19. 19. 10. Black Swan Sometimes life just hits you with a curveball. Unknown Unknowns are impossible to predict (otherwise they would be known) and harder to plan for.
  20. 20. 11. Wrong funding strategy Where the money comes from matters. Don’t go to non-profit financiers with for-profit ideas and vice versa. Hybrid models have hybrid funders.
  21. 21. 12. Lack of focus Trying to be everything to everyone.
  22. 22. 13. Giving Up The only way to fail is to stop trying.
  23. 23. WHY STARTUPS FAIL Jon Gosier & Walid Al-Saqif TED FELLOWS RETREAT 2015