Why 90% of startups fail
Published 3 years ago
More than 90% of startups fail, and that’s the hard truth.
Today we are going to talk about the most common reason why startups fail and how to increase our chances of being one of the 10%.
What’s up notJust developers 👋
This is the first week of notJust Startup Challenge. During this challenge, I will build a startup in public and share the journey with you. If you are not interested in this series, you can opt-out from it here. (don't worry, you will still be on the list)
So, what are the most common reasons why so many startups fail?
They range from:
- bad marketing
- bad partnerships
- competition
- running out of money or failing to raise capital
But the most common reason that kills so many projects is “building something that nobody needs”.
The good news is that with a bit of homework, we can validate our idea relatively fast, without having to develop a finished product that can take years.
To understand better how we get into this situation, let’s compare 2 ways of starting a startup.
The first way:
- come up with an idea
- don’t talk with anyone about it, because they can steal it.
- spend the next year or 2 developing it, or even pay some developers thousands of dollars to develop it
- Release it and wait for magic to happen...
- *crickets*
🗣 Oh, that’s right. There is no magic
As you can imagine, this is not the best way to start a startup. It might have been worked 10, 20 years ago, but in the fast pace industry that we are currently in, we need to move faster, and validate our ideas with as little resources as possible before making the big jump.
Now, let’s see how we are supposed to do that.
- Define a clear target group
- Infiltrate into their communities (online or offline), and spend time with them
- Look for patterns of problems/frustrations/issues that people talk about
- Talk with people from your target group. Validate your idea and assumptions by asking behavioral questions. "The Mom Test" is a great book to help you ask the right questions in order to validate your business idea.
I will stop here because this defines the first step that so many of us ignore. As developers, when we have an idea, we jump right into coding. But that leads to so many amazing projects with little or no need in the market.
If you want to know more about this topic, watch this video where I go into a lot more details about each step, and how I apply this method for my startup
I hope you found this valuable and you get a clear idea of what you should do first, before jumping into coding.
Take care, stay hydrated, and build awesome startups!
Vadim Savin
P.S. Don’t forget that during this challenge, you have the opportunity to participate as well and win up to $1000 for your startup. The only thing you should do, is start working on your project, and on 19th of August, present it during the dome day.
P.P.S. Join me Live on Friday, 1st July. We will start coding the project Live on Youtube.
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