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Many estimate that between 25% and 30% of all startups fail within their first year. The reasons why they are unique to each company, though there are 18 very common causes that we all should avoid.
In 2007, founder of the successful Y Combinator incubator in the US, Paul Graham, jotted down a list of notorious things startups tend to do that end up leading to their awful defeat. Now, the folks at Funders and Founders have illustrated this beautiful infographic for all of us to remember.
In a sense there’s just one mistake that kills startups: not making something users want. If you make something users want, you’ll probably be fine, whatever else you do or don’t do. And if you don’t make something users want, then you’re dead, whatever else you do or don’t do. So really this is a list of 18 things that cause startups not to make something users want. Nearly all failure funnels through that.
For instance, one of the reasons startups fail is because they raise too much money. While pulling in investors is certainly a nice-to-have validation behind ones name, many startups fail to see beyond the dollars. As Graham wrote, “The problem is not so much the money itself as what comes with it.” Similarly, timing is also critical to any startup. Launching too early could be just as bad as launching too late. Anyway, it’s better you have a look at the infographic below:
For the full lowdown behind Graham’s reasoning, check out his blog here.
Infograhic by Funders and Founders