Some startups failed, and some startups succeeded. For every startup, there is a story of struggle and failure to the entrepreneur’s credit. Of course, there is another group of startups that never got off the ground at all. And these stories become the cautionary tales for future startups that are created.

Failure: General Themes

Unfortunately, the story of each failed business is unique. A closer examination of the common startup failures reveals several general themes. The most common themes are inadequate planning, poor market size, poor timing, poor strategic decisions, bad execution and building something nobody wants. Other themes include the inability to determine a strategic direction, an exit strategy, a lack of a product or service fit, a poor funding source, and low interactions within the company. All of these themes require careful testing and revisions to the original ideas and visions of the entrepreneur.

In addition to this theme, each failed startup requires careful questioning of the entrepreneur’s ability to test, tweak, adjust, and evolve his/her business idea. Incorrect testing procedures can result in many expensive mistakes.

Most entrepreneurs fail because of their inattention to detail, poor timing, poor strategic decisions, poor execution. All of these aspects can result in failed startups. The first mistake an entrepreneur can make is not putting enough attention to their discovery process. The second mistake is not setting up proper validation procedures. The Lean startup process helps with these aspects and allows you to use evidence to validate your ideas with real customers. The leanstack process, link here really helps with this and was developed by one of the Lean startup pioneers, Ash Maurya.

A good idea will always test better than a bad idea, especially when it is first tested. Testing becomes much more important when the focus is on improving something for which there is no long-term market size. When working on a new business idea for a small company, the entrepreneur will likely choose an easy product to test. This often results in a bad idea being released before a good one has a chance to show its real value and be successful.

Many failed companies with small markets also started by releasing unsuccessful products or services to grow into large successes later.

Lack of Clear Direction

Startups fail because they don’t have a clear idea of why; the primary reason is lack of clear direction. Entrepreneurs must have a clearly defined goal and a detailed plan for how to get there. Without a plan, there is nothing to hold customers or employees accountable.


Many failed companies started with only a dream of building a huge business that would dominate the entire industry. However, even the largest companies fail because they have a vision and an agenda for success but have no plan to reach that vision.

If you would like to understand more about developing and growing products whether they are digital or physical, as a startup or within an organization, you can obtain more information here.

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