We analyzed 101+ startup failure post-mortems to identify the top reasons startups fail. Here they are.

We dug into our compilation of startup failure post-mortems (currently 101 and growing) and analyzed each one to understand the reason(s) for startup failure.  Yes, we read through 101 startup failure post-mortems and distilled down to the top 20 reasons.

Here you go.

startup failure reasons

 

The Top 20 Reasons Startups Fail
We analyzed 100+ startup failure post-mortems and identified the top 20 reasons startups fail.
  • http://www.businesstexter.com/ David Johnston

    The vast majority are direct causes of #3 “Not The Right Team.”

  • Peter Riley

    The main reason is not listed. Passion and perserverence if team and product are right.

  • alex

    looks like passion is on the list

  • http://sleekdesignstudio.com Will Phillips Jr

    That cover image man. I was like, top reasons startups fail… Assassins creed? Lol. Seriously tho. Excellent data. Great roundup.

  • http://twitter.com/MeierMarketing GotMeier?

    #2 reason “Ran out of cash” aka CAC was greater than expected. https://www.linkedin.com/pulse/article/20141015145845-29122733-why-cac-is-so-evil?trk=prof-post

  • admin_kitili

    Another reason you can add to the list is lack of proper planning or
    planning at all. Also failure to set goals and periodic checks to see
    whether those goals are met or not will result in start-up failure

  • Pierce Smith

    I think #1-undernetworked
    #2. #3 insufficient communication/sales skills

  • Ratsnerife

    David you are so right, All of it is team.

  • http://www.5toolgroup.com/ Jay Oza

    The #1 reason I have found advising startups is that they simply can’t sell. I worked with one startup that ran out of money but had a good product. I came in and helped them get two large deals in less than three months. It changed everything. Suddenly the team wen from dysfunctional to functional. They all overestimate that sales is easy and that anyone can do it. Startup sales is very hard.

  • https://tripcover.com.au/ Desmond Sherlock

    In part I agree with David that # 3 can effect all other reason. But not so much “not the right team” as not the right team rules of engagement.

    How many startups are built on a so-called grand idea rather than building a team around a grand fairness idea. My brother and I have spent more time trying to work out our rules of engagement first so that we can engage when we have a startup.
    http://rethinkperfect.com/2015/03/09/startup-team-explicit-rules-of-engagement/

  • http://BrianHansford.com/ Brian Hansford

    Customers drive the success of a business. No market need means customers don’t care or can’t relate to the offer and value proposition. The best team can produce a crappy solution and still fail because the market simply doesn’t care.

  • dlucero23

    If there is no market need, it won’t matter who’s on your team, your product won’t sell

  • https://tripcover.com.au/ Desmond Sherlock

    But it you have the “right” team they will choose the right market need and product. The team chooses everything in my view. Choose well grasshopper!

  • Anton

    agreed. sales is especially difficult with a new untested product.

  • Anton

    agreed, always difficult taking a new product to market.