 The reasons for the failure of these 101 loss-making start-up companies are various. For example, they have lost out in the fierce competition, they have no financing, they have team failures, and so on. They even include 'bad geographies'. However, the failure of startups has the most common features. What is the reason for one? You may not guess... This article is reprinted from the WeChat public account "ID: BigDataDigest", compiled by: yawei, Xiaolang, Jiang Baoshang, Chris Qiu. Business is difficult, failure is the norm. When Wang Shi visited Sui Shijian, he said a word: 'The man's prowess is not looking at the current failure or success, but looking at the resilience after failure. 'Therefore, for success, victory and courageously face failures. Lessons learned, inspired, the probability of success in the next venture will be much greater. Through investigations, interviews, and research on more than 100 failed startup companies, we have summarized 20 reasons for failed startups.  ▲ Summary of the top 20 causes for startup failure. 20th if not successfully transformed Can not be transformed or changed quickly enough from a bad product, bad employment, or bad decision. 7% of these companies were chosen as a cause of failure. Pouring on a bad idea not only consumes resources and money, It also makes employees feel frustrated because they have not progressed. Just as Keith Nowak wrote in the Imercive case: 'We were trapped in the middle of the transition — in the middle of a strategy that we know would not work and a goal that we believe will be successful but difficult to pursue actively. This is very difficult for both companies and individuals. Place. We were extremely frustrated because we couldn't implement our new strategy correctly, but we did not make any meaningful progress every day. This is the first step toward failure of our company. Even if we have invested everything we have We have spent this period, but we have not yet crossed the can.' 19th overworked Entrepreneurs are often unable to balance work and life, so the risk of overwork is high. Overwork accounts for 8%. Reduce losses when necessary, and when you see a dead end, readjust the direction of your energy investment. Avoiding over-fatigue is considered to be an important ability to succeed. Similarly, there is a solid, diverse and hard-working The team is also very important, so that responsibility can be shared. 18th cannot use its own network and social circle We often hear entrepreneurs complain about their lack of network or investor connections, and we were surprised to find that one of the reasons for the failure of startups was that startups did not make proper use of their interpersonal circles. As Kiko wrote: 'Let your investors get involved, your investors are ready to help you, let them join in the first place, don't be afraid to ask them for help. I think we made all the mistakes we made ourselves, maybe it was Caused by feeling unfamiliar with the business world and feeling insecure. But this is wrong.' The 17th legal challenge Sometimes start-ups can move from a simple individual to a company full of legal complexity, which may prove to be a core cause of entrepreneurial failure. Just as Decide.com wrote in his case study: 'We received notice that they said that we are illegal, unless they delete it, otherwise they will suspend our subsidiary account. We do not make a lot of money, but that account may account for more than 80% of the company's profits.' Some music startups have high costs for dealing with record company issues and legal problems, and that's one reason startups have failed. Turntable.fm, a high-profile startup, writes: Basically, I didn't learn a lot from the failure of music startups. Music startups are an extremely expensive speculation, and the music industry itself is also very difficult to engage in. We spend more than a quarter of our money on attorneys' fees. , royalty and services related to music support. This is restrictive for us. We have to stop our growth because we cannot be internationalized. No.16 investors who are not interested Many entrepreneurs explicitly stated that they lacked interested investors during the seed follow-up phase or the entire process. 15th location Location is a problem, reflected in several different aspects. First, the concept and location of your startup must be consistent. Meetro writes: 'We launched our products and mobilized all of our friends in Chicago. Then, the largest newspapers in the area have done beautiful and detailed reports for us. Things went well... but we will soon Finding the problem: Having hundreds of active users in Chicago does not mean that you have two active users in less than a hundred miles of Milwaukee, not to mention in New York or San Francisco. Software and concepts do not extend to its physics Outside the border. ' 14th lack of enthusiasm and domain expertise There are many good ideas in the world, but founders of startups that have failed 9% have found that lack of enthusiasm and expertise in a field is a very important reason for a failed startup, no matter how good your idea is. Among them, NewsTilt frankly stated that they are not interested in the field of their choice. He wrote: 'Say we didn't really care about journalism. I think it's fair. I expect a perfect blog comment system. At this point we started to create a review product. This turned out to be the best reviewing system ever designed, which in turn made us ponder an ideal customer: Newspaper. Although I think they will never buy, we still want to Out of a product, if it exists people will desire to use it.  ▲Entrepreneurship is like walking a tightrope. It is difficult to go without real enthusiasm. But we don’t really care about journalism, not even enthusiastic news readers. If the first thing we did every day was to go to news.bbc.co.uk and we should have already made this product. But even When we had NewsTilt, it wasn't a place for me to feel happy. I was still browsing Hacker News and Reddit. So how could we create a product that is only of commercial interest?' Changed after the 13th transition Things like Burbn's turn to Instagram, or the transformation of The Point to Groupon can go very smoothly. Or these transformations are the beginning of a wrong path. Just as Flowtab explained in his failure case: 'The transition to transformation is worthless. It should be something that is counted: the development of business model changes, the verification of assumptions, and the measurement of results. Otherwise, you can't learn anything.' 12th place does not match with investors or partners For companies with failed start-ups, discord with partners is a fatal problem. But such sharp contradiction is not limited to the creation of the company's team. When it comes to investors, things will quickly turn bad, just like in ArsDigital. The case confirmed. Phillip Greenspun wrote: In about a year, Peter Bloom, Chip Hazard, and Allen Shaheen (CEO) held absolute power in ArsDigita. During this year, they: 1 Spend $20 million to get the company back to the same profit as when I was CEO. 2 Rejected Microsoft's (Summer 2000) recommendation to become the first software company to own a .NET product (a Microsoft employee and Allen returned from a follow-up meeting to say: 'He reminds me of many CEOs we have worked with before. ...they are already bankrupt.' 3 Discard the old but functionally complete product (ACS 3.4) before completing the new product (ACS 4.x); be aware that this is a well-known method of killing a company among those experienced in software products; Informix itself Destroyed, because people do not know whether to run version 7 or the new fancy version 9, so people turn to Oracle. 4 designed a much more costly structure; I have 80 employees whose basic salary is less than 100,000 U.S. dollars and brought me up to 20 million U.S. dollars in profits each year. There are nearly 200 ArsDigitas in Greylock, General Atlantic and Allen. In the new manager position, the annual salary of each position is more than 200,000 US dollars, and the basic salary of the programmer is 125,000 US dollars, etc. This kind of high-cost structure is caused by the new work culture of 9 to 5 from Monday to Friday. Allen, Greylock, and General Atlantic will not walk into the company's building on weekends. Of course, employees will not. 5 gave up market leadership and thought leadership. 11th place loses focus Thirteen percent of failed cases can be attributed to distracting projects, personal problems, or other distractions. Just as MyFavorites wrote at the end of their entrepreneurial experience: 'In the end when we returned from SXSW, we all began to lose interest. The team was wondering where this would eventually go, and I wondered if I wanted to run an investor, be responsible to employees, and report to the board of investors. Start-up company. ' 10th release product at the wrong time If you publish your product too early, the user's comments may not be well written, and if their first impression of you is negative, it is difficult to get them back. If you post the product too late, you May miss the opportunity in the market. As a Calxeda employee said: 'In Calxeda's case, our technology is updated faster than our customers are adapting. Our innovations in technology are not really prepared to meet customer needs. When they want 64-bit At the time, we provided 32 bits. No. 9 is not flexible and does not actively seek customer feedback The neglect of users does lead to failure. Short-sightedness and failure to collect user feedback are fatal errors for most startups.  ▲Successful experience is similar, and losers have their own reasons. For example, eCrowds, a network content management system company, said: 'We spent too much time building for ourselves without collecting feedback from potential customers, which could easily lead to narrow vision. I would recommend starting from the beginning to mastering The target customer's time should not exceed two or three months.' Similarly, VoterTide writes: 'We didn't spend enough time talking to customers and introduced features that I think were great, but we didn't collect enough customer information. It was too late when we realized it. People are always easy to be tricked into thinking that their products are great. You must focus on your customers and adapt to their needs. 8th bad marketing One of the most important skills for successful companies is understanding the target customers, knowing how to get their attention, and turning them into potential customers and end customers. Whether the product can be brought to market and the company creator has a close relationship. Like to write code Or creating a product, but a company founder who is not interested in product promotion, often leads to marketing inefficiencies. Marketing inability as a cause of entrepreneurial failure accounts for 14% of these cases. As Overto writes: The deciding factor in determining the Internet service life and death is the number of users. For the first time, the number of users will grow systematically. Then we will touch the maximum we can reach. It is time to do marketing. No one of us is good at this. Worse is that no one has enough time to make up for the gap. If we deal with the above issues, this will be another obstacle that we need to overcome. No. 7 had products, now I only need business model The failed founders seem to agree that the business model is important - sticking to a single channel or failing to find ways to make big money will make investors hesitant to make the founders unable to take advantage of every opportunity they acquire. Just as Tutorspree wrote Road: 'Although Tutorspree has achieved a lot, we have not been able to create a scalable business... Tutorspree has not expanded because we rely on a single channel, and that channel has quickly and suddenly shifted from us. SEO from a It began to integrate into our model. As we grow and develop, it becomes more and more important to the business. In our early stage, during Y Combinator, we had no money to acquire. SEO is free, so we focus on it , And skilled use.' No. 6 'User-unfriendly' products Whether intentional or unintentional, bad things happen when you ignore user requirements. Regarding their product UI, Game Layers writes: 'In the final analysis, I believe PMOG (Passively Multiplayer Online Game) lacks too many core game impulses to drive fanatical large-scale adoption. 'Leaves traces of interesting web annotations.' The concept of 'is too esoteric for most people to accept. Looking back, I believe we need to be ready for ourselves, put aside ourselves, and do something that makes the player feel more playable when they first come into contact with the game.' 5th place pricing, cost issues Pricing is a kind of dark art. When it comes to the success or failure of entrepreneurship, it highlights the difficulty of making money by properly pricing products in the context of a company-specific cost. Delight IO saw this struggle in several ways. They wrote: 'Our most expensive monthly package is $300. The lost customers did not complain about the price. We just did not meet their expectations. We originally priced according to the volume of records. Because our customers have no control over the number of video recordings, most users are very cautious when using record amounts. Subscriber volume display, pricing based on the total length of video recording makes more sense to us. The fourth place was out of competition Although past clichés tell startups that they shouldn’t focus on competition, the reality is that once an idea gets fired or approved by the market, new companies may soon be joining in. Although obsessed with competition is unwise, But ignoring competition is also the reason why 19% of startups in our case failed. Wesabe's Mark Hedland talks about this in his post-mortem analysis: 'Because the worse data aggregation method and Wesabe let you do more work, using Mint will make it easier to get a good experience, and this acquisition process will Faster. Everything I mentioned - not relying on a single resource provider, protecting user privacy, helping users make positive changes in financial life - all of these are legitimate reasons for us to pursue what we want. If the product is not easy to use, the above mentioned are all useless. ' 3rd inappropriate team Having a diverse team with different skills is often considered critical to the success of startups. Failed companies often lament, 'I hope we have a chief technology officer from the beginning, or hope that startups have a 'like research The founder of business'. In their post facto analysis, Standout Jobs wrote: 'The founding team was unable to independently develop its own minimally viable product (MVP: Minimum Viable Product). A simple prototype was first developed to quickly test whether your product or direction is feasible. If it is feasible, iterate quickly, constantly modify the product, and eventually adapt to the market's needs. ). This is a wrong understanding. If the founding team cannot launch products themselves (or use a small amount of external help from freelancers), it should not be founded. A start-up company. We could have let more co-founders join. The pay of this group of people can be paid in the form of equity, but we have not done so. In some cases, the founding team wanted them to have more checks and balances. Just as the founder of Nouncers wrote: 'This brings me back to a fundamental issue where I don't have a partner to check me and make decisions for business and technology. Provide sound inspections. ' The second place consumes empty finances Limited money and time need to be properly allocated. How to use the money you have is a question that is often asked, and one of the reasons for startup failure (29%). As Flud's team puts it: 'Depletion of cash often leads to startups' failure to match the product market and the transformation of the company along with other reasons. In fact, the ultimate killing of Flud is that it cannot raise this additional capital. There are several ways to pursue the process of matching (and monetizing) the ever elusive product market. Flud eventually ran out of money and lost it. No.1 build problem solution, not all aiming at demand Solving interesting problems instead of serving market needs was cited as 42% of the top reasons for failure. As Patient Communicator writes: 'I realized that basically, we don't have customers because no one really is interested in the models we built. Doctors want more patients than efficient clinics.' Treehouse Logic discusses this concept in their analysis report: 'When start-up companies did not solve market problems, they failed. We did not solve a problem large enough to universally serve a scalable solution. We Good technology, great data about shopping behavior, reputation as a leader, professional knowledge, good consultants, etc., but what we don't have is a pain point that can be solved in an extensible way. Technical or business model. '
|
