Is It True That Every Startup Almost Inevitably Sinks, How You Can be the Exception?

every startup almost inevitably sinks

Every Startup Almost Inevitably Sinks. If we do a detailed analysis we find that there are always a few common reasons which directly point toward why many of the startups fail. So, let us go through details of why startups fail and what they can do to achieve success in their endeavors.

Is it true that every startup almost inevitably sinks?

According to statistics provided by Harvard Business School, almost 75% of all startups backed by venture capital usually fail. Similarly, in another study it was found that more than 50% of US startup firms fail after 5 years and about 70% after first ten years. The studies concluded that main reasons for such failure are usually:

  • Lack of commitment, motivation and passion
  • Lack of focus
  • Lack of good mentorship
  • Getting advice from wrong mentors
  • Attempts to raise a lot of money too quickly
  • Lack of domain related as well as general business knowledge
  • Presence of over price which means entrepreneur is not willing to listen to advice

startupsuccessThese issues directly point towards lack of business knowledge and problems in decision making that entrepreneurs face. The problems also tell us failure in leadership is also one of the primary reasons why startups fail to achieve success.

In addition to it, the leadership is not able to create a strong team and develop a business model that will work successfully. Even when the business is running out of money, there are some factors which are behind such shortage of money.

Secrets of Success

Every Startup Almost Inevitably Sinks

Many studies have been performed to analyze how any startup achieves success while every startup almost inevitably sinks. In one of the studies by Harvard Business School, it was found that many of the serial entrepreneurs who have achieved success with their earlier endeavors have greater chances of achieving success in their new ventures. However, this is part of the answer since we are more interested in understanding how an entrepreneur can achieve success even when he is launching a startup business for the first time in his or her life. We want to know more about startup success stories.

Presence of Indicators

Let us look at some indicators, which when present help a startup business succeed.

  • Successful entrepreneurs are usually motivated by impact, which results in greater commitment and passion.
  • They are committed to stick to a course as well as their chosen path.
  • Successful startup companies are willing to adjust their strategy however, they do not do so on a constant basis.
  • They also have persistence and patience so that they can adjust to timing mismatch that is commonly seen between what really happens and what our expectations are.
  • Successful entrepreneurs have the willingness to learn, listen and most importantly observe others.
  • They have the capacity and capability to develop mentoring relationships that succeed.
  • Entrepreneurs succeeding in their endeavors are good leaders and have excellent business knowledge, whether it relates to domain specific or general knowledge.
  • They are also expert at raising only enough during their funding endeavors which will help them meet their next block of key milestones (which is commonly known as principle of lean startup).
  • These people are also able to achieve a perfect balance between business and technical knowledge as well as have required technical expertise to make product development successful.

So, how some startups break the jinx that every startup almost inevitably sinks?


#1 – Having a Startup Business Plan: First thing that successful startup companies do in comparison to those who failed is that they are committed to a specific plan. Moreover, these entrepreneurs also ensure that there are no more than 1 or 2 pivots during course of their business.

#2 – Creating a Successful Pivot: A successful pivot often results in a change in direction the business is moving in and causes material change with respect to company’s market and product strategy. Furthermore, the change should be such that it results in modification of associated strategies as well as resource allocation.

#3 – Right Passion: Additionally, successful startup companies have the passion to achieve their goals and believe that they are doing the right thing, plus they are competitive and do not want to lose.

#4 – Listening to Mentors and Having Domain Knowledge: Few of the other things that help them succeed are selection of right mentors and domain knowledge. By having a knowledgeable mentor by your side and focusing on his or her advice, it is quite likely that an entrepreneur would be able to take better business decisions. The second important thing is that the entrepreneur should also have domain specific knowledge to implement their business plans in right manner.

Secret Recipe to Success – A Mix of Technical Knowledge and Business Acumen

However, it does not mean that technical founders who do not have domain specific knowledge will not be able to make their endeavor successful.

There are many instances where the opposite has been proven where companies with technical founders behind them have achieved success.

Irwin JacobsOne of the startup success stories is Qualcomm which had Dr. Irwin Jacobs as its founding CEO and co-founder. For Qualcomm the main differentiating factor from other startups was that apart from being an excellent engineer as well as a professor at MIT, Dr. Irwin is also a very good business minded person with excellent business knowledge. Moreover, before launching Qualcomm, he had prior experience of running a company where he was at the helm of MA-Com and used a good management team to guide him properly.

In similar fashion, a startup venture can become successful when the leader of the company is someone with excellent domain level expertise and in addition to it, there is technical team to look after the responsibility of product development.


As for example, Steve Jobs (Apple, Pixar, etc.) is a very good founder with business oriented approach.

On the other hand, Eric Schmidt (of Google) and Meg Whitman (of eBay) are people who became CEOs at early stage of development of a company to accompany technical founders of their respective companies to create startup success stories.

Some of the other points worth mentioning here are:

  • Have a Startup Business Plan: To achieve success with your startup what you need to have is a business plan. By developing a plan you will be able to find answers for questions which you had not thought about earlier. In addition to it, you need to have a plan so that you can contact people who will provide funding for your business. Additionally, after launch of your startup, it will be necessary to update your business plan on an annual basis. Such regular update will help you find out whether market scenario has changed from the last time you created the startup business plan or if there are new market opportunities that you need to capitalize on.
  • Perform Research: Research will be another aspect you need to focus on since by performing proper research you will be able to fully understand requirements as well as desires of your customers. Moreover, through research you will be able to understand more about your competitors and identify business trends that are to be leveraged to come into the list of successful startup companies.
  • Work with an Advisor: You need not do everything single-handedly but rather opt for a collaborative approach. As such, it will be a wise decision if you are working with experienced mentors and accountants to guide you in sphere of your business activity. Thus, you need to perform close scrutiny of your operations and decide what kind of assistance and advice will help your business grow.
  • Create a Balance: You do not have to work so hard that it becomes necessary to sleep at the office. On the contrary, it will be important to develop a work/life balance by working smartly. It is true that you need to have the right passion for what you are doing but what you will have to do is create the right balance between suitable business practices and passion to get desired results.
  • Select the Right Product: You need to decide about a product which people would want to purchase. In a study it was found that in almost 42% of all failed endeavors, the primary reason for failure was lack of market for the product.
  • Have the Ability to Recover: You need to have a versatile team of experts who will be able to change products as per changing requirements, utilize different marketing approaches, perform rebranding for the business and perform similar tasks as per requirement of the business. Thus, there should be a strong team that will be able to recover from problems business faces.
  • Work with a Co-founder: Many-times it is seen that companies having a co-founder tend to have better success rate. The reason is that accountability increases when there is a co-founder and in addition to it, the co-founder brings in skills which you may not possess.

Thus, as we can see, proper planning and thoughtful implementation can help you achieve success with your startup endeavor and prove the saying wrong that “Every Startup Almost Inevitably Sinks”.

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)


Please follow and like us:

Leave a Reply

Your email address will not be published. Required fields are marked *