8 Founders Reveal Why Their Startups Failed

8 Founders Reveal Why Their Startups Failed


Every new business strives to succeed with the limited resources they have at their disposal. Unfortunately not every dream gets to be fulfilled. Most new startups fail even with angel or venture funds. You may have read the 90% startup failure rate already.

But the good new is that your startup failure in itself is not the end and you have the option to try something new with better experience of what works and what does not work. Don’t get discouraged when failure knocks you down, get back up and try again. As Thomas Edison once said, “I am not discouraged, because every wrong attempt discarded is another step forward.

Some of the top reasons why some startups have failed in the past and others are one step closer to failure are:

1. Choosing to tackle problems that are interesting to solve rather than those that serve a market need

2. Ignoring your users is true way to fail. Know when to ignore user feedback.

3. Team deficiencies-choose your founder with care.

4. Release product at the wrong time can get you into a difficult situation.

5. No matter how good an idea is, if you don’t have some kind domain expertise or knowledge, you are likely to run into problems.

The following startup founders share specific reasons why  their businesses failed in the past.

1. Ade Olonoh, Formspring post-mortem

We protected anonymous content to a fault and out follow-model shot us in the foot

We spent a lot of time on anonymity. It was our sacred cow. Looking back, we should have spent that time finding ways to gracefully degrade that feature instead of finding ways to keep it alive.

Formspring had clearly struck a chord with people aching to share more about themselves with their friends. And instead of making it apparent that they were achieving their goal, we put an artificial barrier in place and prevented them from knowing if Formspring was working for them or not.

The company raised a total of $14 million in venture capital and shut down on March 31st 2013.

2. Benish Shah, Vicaire Ny

We Entered The Market Too Early

We wanted to help people understand the risks behind social media at the corporate level. What we didn’t take into account was that clients at the corporate level didn’t know what social media was at the time.

We spent so much time explaining what social media was that we never got to the point where we could explain what we actually did.

3. Josh Fraser and Rob Johnson, EventVue Post-Mortem

We made deadly cultural and strategic mistakes

– tried to build a sales effort too early, with too weak of a product after initial financing.

– waited too long to address the “nice to have” problem.

– didn’t make eventvue self-serve to let anyone come and get it

– didn’t focus on learning & failing fast until it was too late

– didn’t care/focus enough about discovering how to market eventvue

4. Devver, Lessons Learned

We focused on engineering first and customer development second

Most of the mistakes we made developing our test accelerator and, later, Caliper boiled down to one thing: we should have focused more on customer development and finding a minimum viable product (MVP).

5. - Ziver Birg, ZIVELO

We Weren’t Careful About Who We Hired

The first company my brother and I started was hijacked by its employees. All I have to say is hire people who are sincere and trustworthy. Protect yourself legally. Be frugal. Run lean.

6. Jordan Cooper, Untitled Partners Post-Mortem

Trouble with hiring, timing, and frugality is a double-edged sword

In the face of our inability to find the proper messaging for our offering, we hypothesized that it was due to a lack of marketing DNA within our core team of Andy and I. What we needed was someone to fill this gap, and figure out what we should be communicating to our customer base and how.

7.  Brianne GarciaParceld Post-Mortem

We run out of funding, co-founder quit and took away the code

I stood at another crossroads: I had run out of funding, my technical co-founder had quit and pulled the code out from under me. In retrospect, I see that you don’t have to become your own CTO, but knowing what’s going on under the hood can save you tears, money and time.  My team and I started using Dropbox before switching to Github, and it was too late for some of the code.

8.  Aaron Harris, Ryan Bednar, Josh Abrams, Tutorspree

The team had little experience in the education category and not enough time to gain domain expertise.*

The problem, observers say, is that the company’s founders, Aaron Harris, Ryan Bednar, Josh Abrams had little experience in the education category and not enough time to gain domain expertise.

Beyond that, marketplaces are difficult and tutoring is competitive. It is seasonal and it has geographical limitations. Tutorspree’s biggest issue was that the company was too dependent on traffic from Google, which can be unreliable as Google changes its algorithm.

Tutorspree was making some money, but its founders decided to call it quits.  The company has yet to communicate the final date it’s doors will be closed for good.


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