Why Startups Fail

Why are startups failing so badly everywhere we look?

The first problem is the allure of a good plan, a solid strategy, and thorough market research. In earlier eras, these things were indicators of likely success. The overwhelming temptation is to apply them to startups too, but this doesn’t work, because startups operate with too much uncertainty.

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Startups do not yet known who their customer is or what their product should be. As predict the future. The old management methods are not up to on a long, stable operating history and a relatively static environment. Startups have neither.

The second problem is that after seeing a traditional management fail to solve this problem, some entrepreneur and investors have thrown up their hands and adopted the “Just Do It” school of startups. This school believes that if management is the problem, chaos is the answer. Unfortunately, as I can attest firsthand, this doesn’t work either.

It may seem counter-intuitive to think that something as disruptive, innovative, and chaotic as a startup can be managed or, to be accurate, must be managed. Most people think of process and management as boring and dull, whereas startups are dynamic and exciting. But what is actually exciting is to see startups succeed and change the world. The passion, energy, and vision that people bring to these new ventures are resources too precious to waste. We can—and must—do better.

Credit: Eric Ries

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