If you’ve been thinking of creating a start-up, you might have come across this - "90% of startups fail."

Bull$#!t.

The number doesn’t tell the whole story.

Because many of these ‘failures’ stem from avoidable mistakes, such as inadequate research or inconsistent efforts.

These are not inherent flaws in the business ideas themselves but are rather mistakes that can be corrected with the right guidance and effort.

Usually, when you have a failed start-up, your chances of succeeding in the next one increases - because you have learned from your mistakes and can avoid them next time.

But you don’t necessarily have to fail in order to succeed.

You can learn from the mistakes of others and learn about the start-up world in general instead.

The main reason why this statistic can’t be universal is because not all startups are created equal.

A tech startup in Silicon Valley faces different challenges than a local bakery. Grouping them together doesn't provide a clear picture of the startup landscape.

Let’s look at the whole picture.

Key Takeaways

1. Understand Your Market:

   Conduct thorough market research to identify your target audience, understand their needs, and validate your product continuously.

2. Stay Persistent and Flexible:

   Commit to your vision but remain open to pivoting based on feedback and market changes. Treat failures as learning opportunities.

3. Strong Management and Leadership:

   Hire team members who fit your company culture and possess the necessary skills. Encourage open communication, set clear goals, and invest in professional development.

4. Leverage Luck and Mentorship:

   Increase your chances of success by staying visible, networking, and seeking mentorship from experienced individuals or accelerator programs.

5. Embrace Hard Work and Consistency:

   Building a startup requires consistent effort and dedication beyond typical work hours. Believe in your idea and stay committed through the ups and downs.

Let’s start-up!

Common Reasons for Startup Failures:

There are some common reasons why start-ups tend to fail.

1. Lack of Market Research and PMF (Product-Market Fit)

42% of startups fail because of lack of market research and finding the right product-market fit (PMF).

And you don’t want to be a solution looking for a problem.

For example, Frankly.me was a Q&A social platform where Indian users could connect with celebrities and get their questions answered via video.

But it shut down in less than two years.

CEO Nikunj Jain said the real problem was not achieving a sustainable product-market fit and that public figures struggled with consistently creating video responses.

Basics of conducting effective market research:

• Identify Your Target Audience:
  Understand who your customers are. What are their needs and pain points?

• Analyze Competitors:
  Look at what similar businesses are doing. What are their strengths and weaknesses?

• Collect Feedback:
  Engage with potential customers. Use surveys, interviews, and focus groups to gather insights.

• Test Your Product:
  Release a minimum viable product (MVP) to a small audience. Gather feedback and iterate.

• Validate Continuously:
  Keep testing and refining your product to ensure it meets market demands.

2. Inconsistent Efforts and Persistence

Another major reason for startup failure is inconsistency and lack of persistence.

Take Kiko, for example.

It was an online calendar app with advanced features that were useful for business professionals and event organizers.

Kiko shut down after three years due to the founders' distractions, slow progress, hiring an unproductive team member, and not involving investors early on; its software was sold on eBay for $258,100.

Strategies for maintaining persistence and embracing failure as a learning opportunity:

• Stay Committed:
  Believe in your vision and keep pushing forward, even when things get tough.

• Be Flexible:
  Don't be afraid to pivot if something isn't working. Adapt your strategy based on feedback and market changes.

• Learn from Failures:
  Treat failures as learning opportunities. Analyze what went wrong and how you can improve.

• Set Short-Term Goals:
  Break your long-term vision into achievable short-term goals to maintain motivation and momentum.

• Build a Support Network:
  Surround yourself with mentors, advisors, and peers who can provide guidance and encouragement.

3. Poor Management and Leadership:

Poor management and leadership can also lead to startup failure.

For instance, look at the case of Pets.com. They used to sell pet products and Amazon invested for a 30% stake as well.

Despite gaining publicity through its mascot, was losing money monthly due to mismanagement and high shipping costs.

After nine months of losses, it sold its assets, repaid investors, and shut down

Here’s how you can avoid that:

• Hire for Fit and Skill:
  Look for team members who not only have the necessary skills but also fit well with your company culture.

• Collaborative Environment:
  Encourage open communication and teamwork. Make sure everyone feels valued and heard.

• Provide Clear Vision and Goals:
  Ensure your team understands the company’s mission and their role in achieving it.

• Invest in Development:
  Offer opportunities for professional growth and development. This keeps your team motivated and engaged.

• Lead by Example:
  Demonstrate the qualities you want to see in your team. Show commitment, integrity, and a willingness to listen and adapt.

The Role of Luck and Mentorship:

Sometimes, success isn't just about having a great idea or working hard; it's also about being in the right place at the right time.

For instance, let's look at the success story of Zoom.

While Zoom was already gaining traction as a reliable video conferencing tool, its use skyrocketed during the COVID-19 pandemic when remote work and virtual meetings became the norm.

The timing of the global shift to remote work played a huge role in Zoom's explosive growth.

But it doesn’t always have to be a major global event.

Also, Zoom had already been there for 9 years to become an “overnight success”.

While luck might seem random, there are ways to increase your "surface area" for luck, meaning you can create more opportunities for luck to find you.

• Take More Shots:
  The more attempts you make, the higher your chances of hitting the mark. Experiment with different ideas and approaches.

• Stay Curious and Open-Minded:
  Always be willing to learn and try new things. Sometimes, unexpected opportunities come from areas you weren't initially focused on.

• Build a Diverse Network:
  Connect with people from various industries and backgrounds. Diverse perspectives can open up unique opportunities and insights.

• Be Visible:
  Share your journey, ideas, and successes on social media, blogs, or industry publications. The more visible you are, the more likely you are to attract opportunities.

• Give Back:
  Helping others can often lead to unexpected opportunities. By providing value to others, you build goodwill and a network that can support you when you need it.

Apart from that, having access to resources and mentorship can significantly boost a startup's chances of success.

Take Dropbox, for example.

Dropbox thrived not only because of its innovative product but also due to the support from Y Combinator, a startup accelerator that provided mentorship, funding, and resources.

This helped Dropbox navigate early challenges and scale successfully.

Seek out and utilize resources and mentorship effectively:

• Join Incubators and Accelerators:
  These programs offer funding, mentorship, and valuable resources.
  They can provide a strong support system for early-stage startups.

• Seek Experienced Mentors:
  Look for mentors who have experience in your industry.
  They can offer guidance, introduce you to their network, and help you avoid common pitfalls.

• Utilize Online Resources:
  There are plenty of online courses, forums, and communities where you can learn and get advice.
  Websites like Coursera, LinkedIn Learning, and Reddit's r/startups are great places to start.

Real-Life Examples:

Case 1: Success Story:

Let's talk about Airbnb, a classic startup success story.

In the early days, Airbnb wasn't an instant hit. The founders, Brian Chesky and Joe Gebbia, struggled to get traction.

They launched during a major design conference in San Francisco, hoping to rent out air mattresses in their apartment to conference attendees. Despite their efforts, they initially failed to gain significant interest.

However, they persisted. They went on to Y Combinator, where they received mentorship and refined their business model.

They also made a critical decision to professionalize their website and invest in high-quality photography for listings. These changes helped them gain trust and credibility.

Over time, Airbnb grew into a global platform, revolutionizing the way people travel and find accommodation.

Case 2: Failure Story:

Now, let’s look at Quibi, a startup that didn’t make it.

Quibi was a short-form streaming service founded by Jeffrey Katzenberg and Meg Whitman, which launched in April 2020.

Despite having a star-studded content lineup and significant funding, Quibi failed to attract a large enough audience and shut down within six months.

One major issue was the misalignment with user needs.

Quibi's content was designed for on-the-go viewing, but it launched during the COVID-19 pandemic when people were staying at home and preferred longer content on larger screens.

Additionally, Quibi faced tough competition from established streaming giants and struggled to differentiate itself.

Case 3: A Startup that Faced Initial Failures but Eventually Succeeded:

Finally, let's talk about GoDaddy.

Four years after the launch, the company was struggling, and the founder, Bob Parsons, considered shutting it down to avoid losing his fortune.

However, a moment in Hawaii made him realize that even bankruptcy would only mean working as a valet, which eased his fear of failure.

Within a few months, GoDaddy was profitable again.

Final Thoughts:

So, what have we learned? Success in the startup world isn't just about having a great idea.

90% is those who come into the start-up industry because of the fad and not for a real purpose or vision.

They see success stories and feel like everything will work out, but the BTS looks much different.

It’s more work than a regular job; at a 9-5, you’ll work for 8 or maybe 10 hours a day.

As an entrepreneur, you’ll work 24×7, actively or passively.

By staying committed, and being adaptable, you can increase your chances of success.

Remember, every successful startup story starts with a leap of faith.

Keep pushing forward, stay curious, and don't be afraid to pivot when needed.

You've got this!