Fascinating new data analysis (see report here) from CB Insights on the most common causes of start-up failure as revealed through 101 post-mortem investigations. What struck us was how many of the top 12 or so factors are preventable (the totals do not add to 100% because multiple items were at play in most failures). It is common knowledge that under-capitalization is a major factor, yet “running out of money” was among the most common precipitants to failure. This tells us that entrepreneurs regularly discount the risk this poses to their start-up’s likelihood of success. Same with “no market need.” And then we get to the human relationship issues like “not the right team” or “disharmony among team/investors.”
As with most problems we encounter, the devil in the details is about humans and their inability to think clearly and get along with each other.