Why do most startups fail?

In magazines and newspapers, in the success stories of cinema and numerous blogs, we hear the mantra of the successes entrepreneurs: with determination, genius, correct timing, and – above all – a great product you can also achieve fame and fortune.

There is a powerful myth-creating industry in action to sell us this story. In fact, after working with hundreds of entrepreneurs, I have personally seen how often a promising start leads to failure. The bitter reality is that most startups fail.

Why do most startups fail?

The startup culture is liberal in principle, fitting into the free initiative and broad individual freedom and competition, following the current socio-economic model, searching for opportunities in a constant, cyclical and resilient way, making the entrepreneurial spirit.

Some people are first-growing inventors, who prefer to work without the pressure or expectations of the later stages of the business. Others are ambitious and consider innovation a path towards the organization’s senior management. Others are also especially focused on established business management, outsourcing, maximizing efficiency, and reducing costs. People should find the types of tasks they best adapt to.


The concept of startup presents itself in different ways, although it maintains a centrality in the idea of being organization information. A startup is a temporary organization looking for a business model that is repeatable and scalable. A startup is a human institution designed to create products and services under conditions of extreme uncertainty. Working in conditions of extreme uncertainty startups are extremely flexible organizations, unlike mature companies, which already run a business model, have well-defined culture and hierarchy.

Temporality is present in the concept of a startup as a form of delimitation of the initial stage of an organization that is being born that, after achieving market volume and financial stability, could become a mature organization moving, therefore to a business model, through process, methods, defined values, and profitability.


By environment of uncertainty, it is understood that the entrepreneur would be proposing something new and disruptive to the consumer market, meeting existing demand, but not perceived until then, whether it is in products or services aimed at the final consumer or along the value chain of a larger organization.

It would be up to the consumer to respond positively or reject the new product offered, generating market uncertainty. As for the absence of a previously defined business model, it would be a company structure, concerning the operational and administrative processes for its operation, which would come in response to this new product or disruptive service, and that, for this reason, would also require a new model to be developed and implemented. This business model should be developed as the market response becomes positive to the product or services offered


The two main reasons that direct startups to failure are related to the absence or failures of the business model, as well as the lack of structuring processes aimed at the development of the business as a whole.

Founding entrepreneurs focus their attention on the development of the product or service, dedicating themselves less to a commercial strategy. Also, startups exhaust their financial resources, which could be attributed to failure to conduct scheduled investment contributions, or even as a signal that entrepreneurs did not seek adequate technical support to ensure assertive decisions regarding contributions.

In a study with 65 incubator managers, 71% of the interviewees blamed the entrepreneurs themselves for the failure of startups, due to factors related to maturity, difficulties in teamwork, difficulties in composition and corporate management, technical domain over the product under development and lack of managerial experience.


Once these challenges have been identified, most incubation programs establish the promotion of diversified actions to contribute to the entrepreneur in training. It is concluded from there that the success or failure of startups would be directly related to the quality of the incubation program, and their ability to make entrepreneurs able to forward their nascent companies maturely, with mastery of techniques and knowledge that will ensure the survival of their business in the market.



The unprecedented economic crisis, the inequalities between poor and developed countries draw the conjuncture of international policies specific to neoliberalism. In this context, decent work is incompatible with the population migration process for the search for survival, and with increasing unemployment, both arising from an economic crisis with negative perspectives.

Formal workers threatened by the ghost of unemployment are subjected to a lack of material well-being, economic security, equal opportunities or space for development, increasingly precarious working conditions, becoming increasingly passive to illness. The new modalities of employment contract impose precarious working conditions and the absence of social guarantees.

Self-employed workers, formal and informal entrepreneurs, put themselves at maximum risk of work without guaranteeing pay or social security. Young people and inexperienced adults, with less and less chance of placing in the labor market, seek a form of work that can guarantee their identities as socially inserted adults, become susceptible to the seduction of neocapitalist idealism, and undertake in their startups.

Leave a Reply

Your email address will not be published. Required fields are marked *