Top 10 Reasons Why Startups Fail [Infographic]

By / April 16, 2012 / 0 Comments

It is only natural that you would want your business to succeed. But the odds are stacked against you. Less than 10% of start-ups are successful. So, why do more than 90% startups fail? According to today’s infographic by Visual.ly, premature scaling of one or more of the “core” dimensions is the primary reason for startups failing at the rate that they do. The companies that scale prematurely are labeled “inconsistent.”

The infographic lists the 4 important stages in a startup’s lifecycle, namely Discovery, Validation, Efficiency and Scale, and then compares consistent and inconsistent startups on the 5 core dimensions — customers, products, team, business model and funding.

In a nutshell, the inconsistent startups seem to do the right things at the wrong time and the wrong things at the right time.

Do you agree that premature scaling is the most important reason for the failure of most startups? Share your views on today’s infographic in the comments section.

Highlights of the infographic:

1. Consistent startups raise more than US$ 3 million while inconsistent companies raise only around US$ 1 million.

2. Inconsistent startups have 50% bigger teams before scaling and 50% smaller teams after scaling.

3. Inconsistent startups raise 18 times less money than consistent ones during the fourth and most important stage.

4. Consistent startups have 50% more paid users in the scale stage than inconsistent startups.

 

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Top Reasons Why Startups Fail

 

Infographic courtesy of Visual.ly.

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