Getting clear about why startups fail - the real truths behind failure

I recently read a post about startups & why they fail. Given my background in startups, (15 personally, and hundreds in conversation), I couldn't help but address this mis-information.

The article stated (erroneously) that:

"The key reasons early stage businesses and startups fail is often a lack of 3 things:"

1. Clarity - about ‘who’ they are and what problem they solve in the market.
2. Financial Mastery – knowing what to measure and what it all means (including how well their current marketing efforts are working)
3. An Action Plan - that includes specific targets and strategies to ensure they stay focused.

However, Our team of 27 Mentors & advisors (who between them have helped thousands of startups) all agree THESE 3 reasons ARE WRONG Worse, taking this advice will cause you to focus on solving the wrong problems.

Typically a startup entrepreneur adjusts each of these 3 factors in-flight with the aid of expertise, experience & feedback from a variety of sources. In many cases, they 'build the plane in mid-flight'. For example how many times have you that a startup will pivot, as they defined and refined their value proposition? The fact is that they had to fail at the original model (or more) in order to get to the right one.

Not all advice is equal. Let me be frank. There are a lot of people out there giving advice on startups, that have never done one themselves, or worse, have never 'failed'. Failure is a critical element to such, in life as much as it is in business. But don't just take my word for it (which is the point of the article). Here's what a few 'failures' had to say on the topic.

The great NFL football coach, Tommy Lasorda famously said "About the only problem with success is that it does not teach you how to deal with failure".

"Many of life's failures are people who did not realize how close they were to success when they gave up." -Thomas Alva Edison

"Develop success from failures. Discouragement and failure are two of the surest stepping stones to success." -Dale Carnegie

"I learned more from the one restaurant that didn't work than from all the ones that were successes." -Wolfgang Puck

"My imperfections and failures are as much a blessing from God as my successes and my talents and I lay them both at his feet." -Mahatma Gandhi

"Anyone who has never made a mistake has never tried anything new." -Albert Einstein

So let's get to it. There are 8 real reasons why startups fail, and they boil down to 2 indisputable truths as to why entrepreneurs fail.

The 8 Reasons.

1. You have the wrong, poor or mis-aligned guidance, or you don't heed it. (Note:, the rest all follow from this first one)

2. Your business model is flawed.

3. Your personal life sucks

4. Your team is weak, or non-existant

.5. Your strategy is mis-aligned with your vision.

6. Your message is in-congruent with your offering, or poorly crafted or delivered.

7. Your execution is 'sub-optimal'.

8. Your Resourcing skills (finding customers, partners, suppliers, supporters,  followers,  fans, advocates) are not aligned with your capabilities.

And the the great news is, because these things is these are all your responsibility, they are also within your control. There-in lies your opportunity. (And my own, for that matter).

And the 2 indisputable truths?

1. Your reason 'why' is not strong enough, or

2. Your compelling 'vision' is not big enough or powerful enough to drive you through the tough times.

Here's the best part. If you address the 2 first, you are halfway to fixing the 8 reasons. Again, don't take my word for it. Find out for yourself. Ask your own mentor/ advisors -show them this email. The clever ones might even manage a wry smile.

"To Your Success", Daniel

If you like this post, comment on and share it, &  you might also enjoy these other posts by Daniel

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About Daniel

Also traveling under the alias of 'That Startup Guy',  I am a co-founder of StartUp Foundation (The Startup Accelerator for Experienced Professionals) and am intensely, deeply, passionately dedicated to "The intersection between personal mastery & business entrepreneurship".

My goal is to help you, by guiding you through the steps, and past the challenges and pitfalls, to turn that 'Great Idea' into reality, whether it's a business, service, product, or an app.

And if you've got an experience about startup success (or failure), comment about it. If you've got a question, reach out to me via your preferred social media, or download my media/speakers kit. Other posts can be found here on Linkedin.