Why Startups Fail: Top 20 Reasons l CB Insights

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The Top 20 Reasons Startups Fail
“Why startups fail?”
The United States Of Tech Startups
100 Startups Using Artificial Intelligence To Transform Industries

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From lack of product-market fit to disharmony on the team, we break down the top 20 reasons for startup failure by analyzing 101 startup failure post-mortems.
After we compiled our list of startup failure post-mortems, one of the most frequent requests we got was to use these posts to figure out the main reasons why startups failed.
“Why startups fail?”
Union Square Ventures’ Fred Wilson wrote in a 2018 blog post that the concept of pivoting out of a bad startup idea is overrated, and that often it’s better to just let a bad idea fail:
“The prevalent view of startup founders in Silicon Valley is a delusion that in order to succeed, in order to build a high-growth company, you need to burn out.”
There are many good ideas out there in the world, but 9% of startup post-mortem founders found that a lack of passion for a domain and a lack of knowledge of a domain were key reasons for failure no matter how good an idea is.
“Ultimately when we came back from SXSW, we all started losing interest, the team was all wondering where this was eventually going, and I was wondering if I even wanted to run a startup, have investors, have the responsibility of employees and answering to a board of investors.”
Similarly, the post-mortem for e-commerce startup DoneByNone, cites a lack of focus and its effect on the customer experienced as reasons for the company’s demise:
Pricing is a dark art when it comes to startup success, and startup post-mortems highlight the difficulty in pricing a product high enough to eventually cover costs but low enough to bring in customers

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