What kills companies?

Most startups fail. The question I ask: why?

What causes most companies to collapse? Is it the idea? The team? The lack of execution? Is it competition?

In my own mind, building a business is very simple but also complicated. Reasons for failing is one of the simple parts of the equation. Of course there are exceptions but I think, generally, you can bucket “causes of death” into one of these categories:

  • Lack of execution
  • Build something no one wants
  • Team falls apart

In my mind, those are the most common reasons for failure. It’s not competition. It’s not your pricing strategy. It’s that you either are not shipping product enough or you are building something no one wants. Also, if you cannot gel with your team, then you probably will fail anyway (like a marriage).

We, especially when building new things or starting new companies, put a huge over emphasis on other factors. We worry about raising money, getting the right domain, etc. All of these other things that, in large part, will not make any difference as to whether or not our company will survive.

Of course, these are only my thoughts. At the end of the day, the best founders learn this as they go or through experience. The biggest thing I can emphasize that I believe to be true is that focus is so crucial to success. There are so many distractions in life. Particularly, the tech world is riddled with distractions and bad advice. (Ironic). Advice that will validate you externally but not help you build a successful business. That is why it is crucial you set goals, focus on them, and get the job done.

Now back to this whole failure thing. Luckily, you do not have to take my word for it.

This product, Collapsed, is a directory of failed startups. You can learn a ton from reading their stories — why they failed, etc.

Let me know what you find!


Originally published at Jordan Gonen.

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