Why do startups fail and what are the common pitfalls to avoid?

1. WHY STARTUPS
FAIL
Jon Gosier & Walid Al-Saqif
TED FELLOWS RETREAT 2015

2. THE UNIVERSE IS CONS-
PIRING AGAINST YOU.

3. IT’S MATH.

4. “The default state of
startups is failure.”
- Chris Dixon

5. This is probably you.

6. This where most
companies start.

7. This is how most
companies see themselves.

8. Optimism
(a.k.a Healthy Delusion)

9. Startups overwhelmingly
fail for the following
reasons:

10. 1. Run out of cash.

11. 2. Founder feuds

12. 3. ‘Super-Founder’
Syndrome
Not trusting your team, failure to
delegate responsibility. Hiring the
wrong people (friends and family
instead the right people for the job).

13. 4. Poor casting/hiring
Hiring the wrong people (even without
nepotism) can be disastrous. Its
always harder to get rid of people than
to bring them on.

14. 5. Unrealistic expectations
The inability to deal with reality
versus ambition.

15. 6. Dues ex machina
Expectations of a “savior” to emerge
and turn everything around. (ex. venture
capitalists, new hire, acquisition etc.)

16. 7. Dues ex machina
Expectations of a “savior”to emerge
and turn everything around.

17. 8. Lack of discipline
No/Poor planning. Not adhering to
budget (ex. overspending). Not
having a budget. No long term
strategy.

18. 9. Undercapitalized
This usually means you’re trying to
accomplish too much with too little
(foolish optimism) , or you’ve taken
less money than you needed to begin
with (poor planning).

19. 10. Black Swan
Sometimes life just hits you with a
curveball.
Unknown Unknowns are impossible
to predict (otherwise they would be
known) and harder to plan for.

20. 11. Wrong funding strategy
Where the money comes from
matters. Don’t go to non-profit
financiers with for-profit ideas and
vice versa.
Hybrid models have hybrid funders.

21. 12. Lack of focus
Trying to be everything to everyone.

22. 13. Giving Up
The only way to fail is to stop trying.

23. WHY STARTUPS
FAIL
Jon Gosier & Walid Al-Saqif
TED FELLOWS RETREAT 2015