Existing statistics vary on the assessment of failure rate for startups, but it is generally estimated to be around 90 percent. It’s sobering to face the fact that fewer than two one of every 10 new businesses will still be in existence a few years from now. But entrepreneurs are, by definition, optimists, so statistics like this seldom discourage them.
Overall, this is a good thing — after all, there’s no point in starting a company if you don’t believe in your vision. At the same time, it’s sensible to be realistic and address some of the reasons why so many startups fail. As someone who has experienced both successes and failures with startups, we have found that one of the most worthwhile things you can do is make a study of failure.
The following tips are taken both from our experience and from studying some high-profile startup failures in recent history. To avoid problems early on beware of launching too early while having too many bugs unfixed, being underfunded (or overfunded), ignoring what your customers want and learning from others’ mistakes.