6 Lessons for Startups from a Museum Dedicated to Failure

Start your week on a positive note with this Newsletter ?

Every week, I carefully curate inspiring articles and share my thoughts, accompanied by motivational quotes. I hope you enjoy this next edition of my Monday Motivation, and I eagerly anticipate hearing your feedback and suggestions for future topics.

This week I would like to focus on the rather new, but not at all distinct topic from those we have covered in the past.? Generative AI continues to grab the headlines with promises of both utopia and doom. As usually, I believe the truth will lie somewhere in between. Whichever way we look at it though, this technology poses very real opportunities for entrepreneurs.? People have never been able to do more with fewer resources and at such low cost, creating opportunities for disruptions across (dare I say) all industries and geographies. Yet, at the same time, recent data from the US shows a significant increase in startup failures, a stark reminder that even the most promising ventures can crumble.

Today’s article, 6 Lessons for Startups from a Museum Dedicated to Failure, provides a unique lens through which to identify six key “Forces of Failure”.? The author, founder of the Failure Museum, has meticulously cataloged over one thousand failed products and businesses, from the Pets.com sock puppet to the ill-fated Google Glass, to offer valuable insights for entrepreneurs to ensure they learn from the mistakes of others. While failure can be a painful experience, it also presents valuable chances to learn.

Poor Product-Market Fit.

This is the most common reason for failure. Products lack compelling features or fail to address a genuine customer need. The Harley Davidson cologne is a prime example - a product that didn't resonate with the brand’s core audience.

Financial Mismanagement.

Running out of money is another major culprit. Companies can fall victim to excessive debt, lax spending, or over-dependence on a single revenue stream. Webvan, the ill-fated grocery delivery service, is a cautionary tale of burning through vast sums before establishing a viable business model.

Neglecting Customer Success.

Failing to prioritize customer satisfaction can lead to churn. Inadequate features, poor quality, and weak support can erode customer trust. Apple's Newton PDA, with its unreliable handwriting recognition, is a case in point.

Overwhelming Competition.

Every business faces competition. Underestimating competitors or failing to innovate can be fatal. Myspace, once a social media giant, couldn't keep pace with Facebook’s rapid evolution and lost its dominant position.

Bad Timing.

Unforeseen events or entering a market at the wrong time can be detrimental. The Amazon Fire Phone, launched after the iPhone and Android smartphones were well-established, is seen as an example of bad timing.

A Weak Leadership Team.

Poor leadership can cripple a company. Unethical behavior, lack of vision, and an inability to build a strong team can lead to disaster, as exemplified by the downfall of Theranos.

I think that there may be a few other forces which could have been listed, like choosing the wrong initial investors and failing to pivot in the face of significant evidence to do so, but I find the six forces identified by the author to be spot on.? By embracing the lessons of the past and proactively addressing these potential pitfalls, entrepreneurs can navigate the challenges of the startup world and increase their chances of building successful and enduring businesses.

Stay on the beat with me and have an amazing start to your week ?

Yours,

Mark

Source

Jacobsohn, S. (31 January 2025) 6 Lessons for Startups from a Museum Dedicated to Failure. Harvard Business Review. https://hbr.org/2025/01/6-lessons-for-startups-from-a-museum-dedicated-to-failure