A lot of startups are failing. The United States Bureau of Labor Statistics says that 10% of startups fail within the first year, and the percentage increases every year afterwards. Ultimately, they say that only 10% will remain in the long run, while the remaining 90% will fail at some point.
But now, what do we call startup failure?
For the most part, what hits the news as a startup failure is the point when the founder decides to throw in the towel and give up. The startup may have failed a long time ago, or it may not have even failed yet, but when the founder decides to give up, that startup is now qualified as a failed startup.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Now what I think is that most people give up on things too early, and this comes to play even when they start up a business. They have this awesome idea; they try it for maybe some weeks or months, and if it does not immediately work, they give up and move on to what they suppose would be the next big thing.
Do you agree?
One reason this could happen is that the founder has too many projects going on concurrently. And so, once they think something is not working out, they drop it and think to focus on something else that probably seems to have a higher potential to work out in their opinion.
Some experts have suggested that age and experience might be a factor, because a lot of these hit-and-run cases are common with very young entrepreneurs. That’s why every now and then, we meet founders in their twenties who already have 7 failed startups or maybe even more. And often, if you probe it, you could find that most of the startups were abandoned before they even had a chance to be successful.
Another reason this happens is impatience. Building a startup is hard work and long-term work. There will be times when people criticize what you are doing, other times when they say it is not going to amount to anything. Worse still, there will be those times when people are not even saying anything at all, and for founders, this may be the toughest time, even tougher than the discouraging talks.
If you consider the stories of most super successful founders, you will see that these were people who stuck on to the idea at a point where every other person had given up. They kept going even when people said their product sucks, or when they said nothing.
Did they ignore the comments? Not at all. But they took it in, and decided what to do with it. They decided whether to change strategy, tweak product, or pivot into something else altogether. But the important part was that they did not throw in the towel.
Some of these super successful founders also have the tale of one or two startup that may have failed in their hands and here is what I think is important to note. They made the decision themselves, on when to stop.
And that is what you should do too. Make the decision on when to give up, and often the most ideal time when that makes sense is when you have run out of all your ideas and strategies, and still not broken through. You have done the research, asked the questions and made the changes and still don’t get it right. At that time, you could make the decision to stop and let it go.
Importantly too, that is not the time to jump into another startup, but to retreat into the research and learning stage. Pick out the lessons from that failed startup before moving on to the next.