In the in-depth study of our interviews with the founders of 80+ failed startup projects, we found that the most common reasons for failure are the following:

Don’t invest a lot of time and resources before you are confident people want what you are offering.

1) Marketing Problems (56%)Marketing mistakes were the biggest killers, and the biggest problem by far is lack of product-market fit.

Validate your assumptions quickly and cheaply, and if needed – pivot.

2) Team Problems (18%)

Problems like lack of domain knowledge, lack of marketing knowledge (and plan), lack of technical knowledge, and finally – lack of business knowledge are the biggest killers.

Friction within the team, lack of motivation, and lack of availability are also common but less deadly.

3) Finance Problems (16%)

More than 50% of the interviewed founders didn’t have a budget for their project, and 75% were self-funded, yet only 16% pointed to financial problems as the reason for failure.

That’s because you don’t really need a lot of money to test and validate concepts (you need effort). You need money to grow an already validated concept, so financial problems plague mostly exclusively later-stage startups.

4) Tech Problems (6%)

Rarely a big killer, even though the vast majority of the interviewed startups have some kind of technology in their core.

The biggest mistake is over-investment in expensive technology (developer time) before the marketing assumptions have been validated.

5) Operations Problems (2%)

For software startups like most of our interviewees, operational problems are understandably rare. This might not be the case for startups that work with physical products.

6) Legal Problems (2%)

It is largely overestimated and very rarely the reason for failure. That said, heavily-regulated industries like food and finance still present legal obstacles.

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