Why 9 Out of Every 10 Startups Failed

If you have not been there, you are only guessing, and fortunately, you may scale through but many never. Even getting it right through try and error cost so much. 

I had a taste of starting a business early in life and I wish I keep going that way maybe the many mistakes that I made later in my entrepreneurship journey could be minimal compare to what I eventually encounter.

When I got admission in pursuit of my advanced education, I have to call it to quit out of ignorant, although not bad, since that is a dream for an average teenager with the expectation of getting a good-paying job after graduating. In a nutshell, being an entrepreneur is never an ambition then, I just stumble into it by chance as an alternative to earn money. That is the case of many business owners out there: entrepreneur by accident.


Did you believe in this theory?

9 out of every startup business failed. Yes! The reason is because of the wrong view and knowledge about what entrepreneurship is and is not. The first reason why 9 out of every 10 startups failed is that they don’t believe in this theory. They are fireproof for failure. Their ideas are so genuine it can’t go wrong. That assumption get them started wrongly, get them going in the wrong direction until they found themselves at the end of the tunnel where they can’t move forward again. The solution is simply learning, implementing the knowledge, and having an open mind.

In addition to the point above, here are other reasons why 9 out of 10 startups failed;

Wrong Ambition and Plan

The only way to get the best out of any effort is to have a good plan. While luck has its role to play, the truth is that it happened when “opportunity meets preparation” – Seneca.


  • If you choose to go into business just as an alternative to earn money, you are starting wrong, although you may be fortunate.
  • If your reason for starting is for the title, you may be disappointed
  • Entrepreneurship is not a get-rich-quick, but you can make a good fortune in a short possible time if you follow the process


Entrepreneurship and Self-Employment

The cashflow quadrants by Robert Kiyosaki explain this better. If your presence is needed all the time for business to go on, you are not an entrepreneur.

Entrepreneurs have systems that generate money for them. They set up a business, employ people who can handle it while the strategies to grow the company. 

Even if you scale through the 10 years survival period but have little to nothing to show for it or have to be there all the time for business to go on, you are not an entrepreneur.


Lack of Good Team

To start alone is not a bad idea, but you should be ready to put in place a good team in no time.

While it is good to put together an employee as a team, having a co-founder is better. But in the process, get someone that has what you lack. That is what makes two good heads better than one. A combination of idealist and realist will make a good team to find a balanced ground when they put head together to make a decision.


Location and Environment

Thinking that affordability is a criterion to determine the right market is a wrong judgment. That is what makes the difference between location and environment.

Starting a business in the right environment with a wrong location is bad, so also having the right location in an environment where such a business cannot triumph is a suicide mission.

Business cannot scale beyond its environment even with a good location, except you only chose to test run the idea in such a place before lunching it big in an environment that will encourage going big. Although, technology discredit location if you can digitally position yourself.


Little Attention to Marketing and Sales

Robert Kiyosaki, a bestselling author of personal finance says, “I have not heard about best-written author, it is always bestselling author”. This is to express how important selling is to success. It caught across all industries and professions. You might have the best business, quality product, and services but if you are not good at getting it to as many markets as possible and convince consumers to part their money for your products/services, you will end up being part of the 90% of startups that close shop.

Typical startups spend millions on production and office space with little on marketing. Imagine recruiting less qualified people for the most important aspect of a business. If you know you can handle it, then subcontract it to a company that can do that successfully if that is even a good business decision for a startup.


Lack of Funding

No matter how beautiful your idea, it needs funds to get to the market. In addition to selling, another important skill a startup should take seriously is the ability to raise funds.

While the fund is not the major requirement to start a business, lack of it at the time to scale up will kill the business given competitors with fund the upper hand even though you may have quality products/services.


Exit Point

Sometimes, the best way to save the ugly incident of folding up is to exit honorably. You either do this by selling 100% or bring in investors with expertise and credibility. This is still hanging on selling and fundraising skill. On this, it is better to call in an expert to do it.

But many startups are sentimentally attached to their business finding it difficult to let go, which is not good for business.



You could be lucky and scale through all this unknowingly. But I found out that to be successful as an entrepreneur just like any other profession, starting early and growing up learning through the process work well which is what majority entrepreneur is missing supporting my assertion that it depends on where you get your knowledge.




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