Why Startups Fail

Bar chart of top 20 reasons startups fail

By Bill Arnold

CB Insights had a post back in 2017 based on an analysis of 101 start ups that failed. It is interesting to note that the number one reason given was “We created a solution that didn’t have a problem”. In other words, the founders became convinced that they knew who the market was, and that they knew what the problem was, and they sought (unsuccessfully) to push that product down the throat of the market. Markets won’t respond positively to that. As a result, the company fails. This is why the Purdue Foundry exists; the primary focus of our model of mentoring entrepreneurs is to help them find product-market fit. Barring that, our job is to concede that the right thing is to walk away from any attempt to commercialize the particular technology. Sometimes this is about the timing. Sometimes it has more to do with the team that is trying to make the fit happen, but more often than not, it is a result of solving a problem that simply does not exist for enough people to be an effective market.

Stay tuned for more details about how the programs and services at the Purdue Foundry are helping our startups avoid these missteps that lead to startup failure.

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