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There’s a CB Insights study that you’ve likely seen about why startups fail. Their list is the classic, greatest hits, of why startups fail:
- Run out of cash
- No market need
- Got outcompeted
- Flawed business model
- Regulatory/legal challenges
I could go on and on. But, I’m here to tell you none of these reasons are the real reasons that startups fail. Yes, I know, startups run out of cash, don’t identify the right market need, get outcompeted, have flawed business models, and succumb to regulatory and legal challenges.
However, these reasons are the effects of the real reason most startups fail. The real reason that most startups fail can be traced back to one reason. Are you ready? Here it is:
Startups fail because of bad management.
Think about the list above. Why does a startup have any of these problems? It’s usually bad management that causes your startup to fail. Let’s go through each of them.
A. Running out of cash.
For example, there are lots of startups that have raised lots of money over the past few years, and are unicorns on paper. Many of the management teams just assumed that…
