By Tom Eisenmann
Patterns behind entrepreneurial failure
Subject
Themes
More than two-thirds of new ventures fail, yet the causes of startup failure remain poorly understood. A multiyear research project combining dozens of founder interviews, twenty MBA case studies, and a survey of 470 early-stage ventures reveals six recurring failure patterns that cut across industries and founding teams.
More than two-thirds of new ventures fail, yet the causes of startup failure remain poorly understood. A multiyear research project combining dozens of founder interviews, twenty MBA case studies, and a survey of 470 early-stage ventures reveals six recurring failure patterns that cut across…
Published in 2021, this analysis of startup failure emerged at a moment when the venture capital ecosystem was experiencing one of its most dramatic boom periods. Global VC investment had reached record levels, startup valuations were soaring, and the cultural celebration of entrepreneurship had…
When a startup fails, everyone reaches for a simple explanation. Investors blame "bad jockeys." Founders blame market conditions. Journalists pick the most dramatic detail. This instinct to reduce complex outcomes to a single cause is deeply wired into human cognition, and it systematically distorts…
One of the most treacherous dynamics in startup growth is the assumption that early customer enthusiasm will carry forward to mainstream adoption. Early adopters and mainstream customers often have fundamentally different needs, behaviours, and tolerance for imperfection. Confusing one group's…
Venture capital investment follows predictable boom-bust patterns that can destroy otherwise healthy startups caught on the wrong side of the cycle. Understanding these dynamics is critical because financing risk, unlike demand or execution risk, often has nothing to do with the quality of the…
The decision to shut down a startup is among the most psychologically fraught choices a founder will ever face. Nearly every founder who has been through it reports the same two reactions: the process was emotionally agonising, and in hindsight, they waited too long. Understanding why this delay…
Six widely celebrated principles of entrepreneurship, each individually sound, can become destructive when followed without nuance. The paradox is that the very qualities that help founders launch ventures (boldness, persistence, passion, ambition, focus, and frugality) can also push them toward the…
Jibo, a social robot created in Cynthia Breazeal's MIT Media Lab, could track faces, initiate conversations, and dance on command. After raising $2.2 million in seed funding, the team recruited Steve Chambers from Nuance Communications as CEO and pivoted from targeting the elderly to positioning…
Alexandra Nelson and Christina Wallace, best friends at Harvard Business School, launch Quincy Apparel to sell affordable, stylish, better-fitting work clothing for young professional women. Their innovative sizing scheme allows customers to specify four separate garment measurements. Trunk shows…
Lindsay Hyde founds Baroo in 2014 as a pet care service partnered with apartment buildings in Boston. After her original concept of office pet daycare reveals no demand, she pivots to residential buildings and raises $1.2 million from angel investors. The launch at Ink Block, a newly converted…
Jason Goldberg and Bradford Shellhammer pivot from Fabulis, a social network for gay men, to Fab.com, a flash sale site for design-conscious consumers. A viral marketing campaign ("Convince 10 friends to join, get a $30 credit") attracts 165,000 members before launch in June 2011. Growth is…
Shai Agassi, a former SAP executive and candidate to succeed its CEO, founds Better Place in 2007 with a vision to replace every petrol-powered car on the planet with an electric one. Former Israeli prime minister Shimon Peres tells him, "This is a better job, because you can save the world." With…
Christina Wallace spends three weeks alone in her apartment after being forced out of Quincy during its dying days, ordering meals from Seamless and watching all seven seasons of The West Wing. She has invested all of her savings in the venture, accumulated considerable credit card debt just for…
By Tom Eisenmann
Subject
Themes
More than two-thirds of new ventures fail, yet the causes of startup failure remain poorly understood. A multiyear research project combining dozens of founder interviews, twenty MBA case studies, and a survey of 470 early-stage ventures reveals six recurring failure patterns that cut across industries and founding teams.