I've been working with startups since 1995, and I’ve seen countless startups fail. But why does this happen? Why do startups fail?
My experience has taught me that there are mainly two fundamental failure modes that can cause a startup to go out of business. Pay attention because this can save your business as well!
The obvious reason, and one that can happen to any type of business, is that they run out of money.
The second reason is that it doesn't actually solve a problem that enough people care about and therefore you don't have a market. You know how when you go to the supermarket, for example, and there are endless choices and products that you can choose from. Do you buy all of them? I bet you do not. However, some other people do, so there are markets for many of those products.
So it's of utmost importance to have an idea that is marketable, and a product that people want. It is not enough only to have a good feeling about your idea, or your friends and family to support it, you actually have to make something that people want and will pay for.
The main reason behind startup failure is when they fail to find a product or a service that really has a market. Do your homework and pick up a great idea that has a market and potential customers.
Improve your startups chance of finding a market by joining our community. The "Where to Play" course, developed with co-authors Marc Gruber and Sharon Tal, which will teach you how to use the Market Opportunity Navigator to find your most attractive market opportunity. Then use our blitzscaling canvas to get started thinking right out of the gate about how to design the most scalable business model possible.