Why do so many startups fail?

They build a product that no one needs.

This is also known as finding “product market fit”. This is the number one reason companies fail. Not because they run out of cash or lack the ability to scale. Take the time to figure out if anyone needs your fix, then build a product. Do not build in a vacuum based on assumptions. Building a product, then trying to find customers for your fix is as prone to failure as it sounds.

Most founders are trying to solve a problem they personally have, or they invent a problem to solve.

Think about your last startup failure. Did you try to solve a problem you had? Worse yet - did you invent a problem to solve?

I have made both of these mistakes. For years I was obsessed with coming up with ideas, and then picking the right idea. The perfect idea. I thought - If only I could find that one great idea, my startup would be a success. I was literally inventing problems to solve.

When I figured out that was not the way to go, I turned inwards. I thought if I had a problem, chances are other people would have it to. Right?


Test your assumptions with real customers to get feedback early on.

If you do take the time to listen to people and identify a problem, don't assume that its a problem people are willing to pay for. Test all of your assumptions. Is this actually a problem more than a handful of people have? Will they pay for it? Will they pay enough for it that it will sustain your business?

Ask questions and test all of your assumptions with real users.

Building in a silo

Think about these two scenarios.

Scenario 1: You make a custom sandwich then go try to find someone to eat it.

Scenario 2: You make a sandwich that a customer ordered, and you have ten more customers behind them just like customer 1 who want the same sandwich. You make more sandwiches.

Which one of these scenarious makes more sense?

You can apply the same logic and process to your startup. If you identify a problem, get feedback on it throughout your process. Invite your potential customers to try things out - even if they are not perfect. Once you nail down some initial requirements, find more potential customers to validate what you came up with.