It’s been said that more startups die from suicide (they did themselves in) than from murder (someone outside did them in). In your view, what are the things that kill startups?
Sometimes it could be a terminal illness (e.g fundamental problems with the unit economics of the business) this kind of death is on the long term, it basically has no cure (no amount of Chemotherapy investment can fix profitability), other times it could die of just plain starvation(running out of funds).
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Gunning for level 9 while at ground zero, naturally only a few can make the jump and when you land you gotta keep running. Both the circle of entrepreneurship and business growth is bound to acceleration.
Reason the successful crop of startup founders are invariably more brains than brawls.
Why success is lower in this clime is that all the guys on a much higher (personally, I don’t think any body has made the jump yet) level of experience need to bargain wholesale what they know to this new crop of enterpreneurs, the latter can’t accelerate experience any other way, protect their interest and help drive their growth; a simple introduction could go a long way. But they’d rather be in competition with ‘you’ and are ready to prove you wrong.
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Lol… The comparisons… Suicide, murder, terminal illness, starvation 
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Lack of funding.
Proper CSI things here…
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Simple. Like all businesses, you die when you run out of cash.
How do you run out of cash?
- You have no market because either your tech (or branding) is not good enough or it’s a solution looking for a problem.
- Your market is too poor because you focused on selling a nice-to-have to students, over-squeezed SMEs, IDPs or some other penny-pinching, economically under-attack demographic.
- Your overheads are commensurately too high thereby giving you a runway shorter than Bigiano’s career. The biggest overhead is usually manpower. Hire too many people, and die a death by a thousand cuts.
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See doctors in the house.
What about the founder? What if the person isn’t startup tested and trusted? What if the person has the wrong motives? What if he employs his guys and doesn’t realize startups are businesses?
Me thinks that from every 100 startup deaths at least 80 are from founder mistakes or incompetence.
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Important to note: Startups don’t die suddenly. They die very slowly, and everyone involved will live in denial.
Again to note: when you found a startup, the default compass is to die. You have to consciously and deliberately calibrate it to work.
And on this: http://blog.samaltman.com/startup-advice
And whatever you do, never forget mediocre people don’t build great companies. Great people do. And great people will never work on silly problem, or work with an asshole or bullshitter.
In my little experience, work on only a problem you find truly important, and resolve to fix, and find the best people to help you. Else it’ll be tougher getting through.
Value compounds too. It’s easy to waste your own time. I digressed too quickly, but hope the most important points are sha, extracted.
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It’s the most scientific summary I ever read (read the transcript before seeing the video). Every thing else isn’t as apt in my opinion. Either the ones I read are too opinionated or my personal experiences are too infinitesimal to infer from.
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The Answer to this is a myriad of different things but critically, Leadership and Sustainable Business Strategy.
Leadership:
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Articulating Vision and driving it home to top of mind amongst workers and making sure they understand what it means and how each person contributes to that vision.
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Being transparent and letting staffs know when things are difficult so everyone provides solution, Structure and Policies to make staffs more at home( they are your first customers, never forget).
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Empathy to co-workers( Do not travel abroad or disappear during Salary time and be around the place yet no word on payment or if there is a delay why and solutions, Economy is bad, we know so what else?( Dont treat staffs like beggars or below you, demean them, dont do what you wont accept, treat everyone with respect and equal).
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Reporting mechanism, you need to gather as much data on the health of your company by doing snapshot reports and encouraging transparency in departments, so everyone at least knows what each person is up to and when there are slip ups how to correct them, if not the all is well will keep up till the day where you have to troubleshoot and it hits you home.
Sustainable Business Strategy
Pivot Always, Cash is King, Partnership, Explore new business.
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Lack of a distribution strategy maybe? You’ve built something cool and nize yes but how are people going to hear about it and start using it?
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Brand Building = User Adoption, if no one hears about your brand how would they use your product, the trick is to have a cult following with very little Marketing budget spent.
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Very succinct; backed by empirical evidence. Timing is really important in the context of the pain point/problems potential customers have together with the circumsatnce that created them; the available means through which they access already existing solutions (that are filled with shortcomings relative to their expectations) to the these problems (relative affordability, ease of mastering and high population penetration of such means, for example mobile phones and internet access in the present time, and TV and radio and desktop computers in the 90’s and early 2000’s); the behavioural transition status of these customers in the mastering of newer means (high-end performance PCs and smartphones, virtual and augmented reality platforms, etc) of gaining access to solutions (newer and better) that leverage them; and the increasingly future expectation of these customers of never-before-seen solutions that solve same and other problems in their lives by fully optimizing these newer means of accessing solutions to problems which they (the customers) have mastered or are perfectly getting comfortable with in terms of accessibility and affordability. All of this is what drives innovation in any company. Having initially got it right with the right, timely product or service, you have to keep pace with these components of the timing dynamics to inspire innovation that ensures your product or service keeps adapting to meet the right need and at the right time. It also confirms, to some extent, that you can’t fully and objectively predict what kills a company until after its demise.
Everyone here have practically said it all. To add my 2 cents. I would say the biggest mistakes i often see startups make is the LACK OF A STRONG VALUE PROPOSITION and PRECISE EXECUTION.
Startups tend to be cut up with their own ideas too often for them to see that there is no road where they are threading. They tell themselves they’ve got a million dollar idea without really thinking if it an idea worth building upon. Not enough market research is done to really see if they got potential customers, not just customers but people who can pay for their stuffs.
Execution is like shooting in a firing range, it the person who hits the target most times wins. Apple has grown biggest under Tim Cook than under Steve Jobs because Tim Cook has always be the executioner, the guys who nobody knows but always doing the killing. Imagine the being let loose after Steve Job’s death, he went mad with the awaiting roster of visions and plans Steve left behind. People often say Apple has not innovated much since Steve died and i concur.
Startups need to realise that a strong value proposition and master execution plan will always win anyday anytime.
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Agree with this. The term is premature scaling.
Blackbox VC did a study on this and this was the number one reason startups commit suicide.
Some symptoms of premature scaling
- too many co-founders
- taking too long to release a product or features
- spending a lot on unnecessary things to look like a real company (office, cars, etc)
-too much structure - a business plan
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How ironic! Ain’t nobody got time for that!
All these answers quoting American sources. Have people here not yet realised how TechCrunch thinking does not apply in Africa?
If you ask me, the number one reason for start-up failure in our context is that most people are not in situations that allow them to persist with their ideas for long enough to succeed. Persistence is the most important quality for success. We’ve all heard of how Linda Ikeji persisted with her blog for 5 years till she eventually struck gold, but how many Africans can afford to do that? In Africa most people can only afford to experiment with a business for a few months before a myriad of 3rd world pressures start to relentlessly bombard you in the face. Even amongst the funded start-ups, I know of many founders who have diverted investor funds to traditional hustles like farming after only a few bad months at the start.
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We die because we don’t persevere… We all want to blow in 6 months…
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1 billion likes for you and you alone.
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