Why do you think so many startups fail?

We of course have our opinion about why a startup fails, or, the other way around, why it succeeds, and this opinion is shared with many other entrepreneurs. 

However, based on tonnes of conversations with aspiring entrepreneurs, we noticed that they are sometimes too worried about things which might not determine their success. For this reason, we ran a poll on our LinkedIn profiles for a week and collected 250 answers. 

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Let’s define each of the answers:

• Product not good enough: it is a product which is uneasy to use, has poor features, is slow, is unpolished, has a lot of bugs etc… you got the idea. 
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• Bad team: is a team where the CEO, senior staff, engineers and any other key member are not suitable relative to the solution they are trying to build. We are talking of lack of skills to execute optimally against their opportunity.
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• Don’t get funds at the right time: means that your startup dies because of lack of monetary resources. 
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• Product people don’t want: translated is lack of product market fit. PMF is easy to identify: it is when you have so many people using/buying your product that you need to hire more people to be able to meet the demand. 

If we have to take our call, we would go for the last answer: PMF. If the market is great and you have the right product for it, the market itself will pull products out of the startup. Your work will only be to answer to customers reaching out to you to buy your product. 

Product only has to be viable and basically work, it does not have to be perfect. Customers will use it anyways. And customers do not care if the team is good or bad, as long as it can pull out a usable product.

Let’s put it this way: you might have the best product, but if the market does not need it, customers won’t care. They just won’t use it. You might have the best team in place, but again, if you are using all your skills to build a product which is not required, the team does not matter anymore. If you are able to raise an insane amount of funds but you use it to build a product people won’t use, it will just be a waste of resources. 

Sure, a great team is important, as hopefully is going to give you a good product and figure out a good market. And also a great product is important and might help you beat competitions, but it is only relevant when you target a big and needy market. Funds can help you survive longer and perfect your product, but if you have PMF, you will have enough resources coming from your sales to survive (also, just to give you some food for the brain, how many VCs are going to invest if you are not at least close to PMF?). 

This said, of course it is possible to be in the best market ever, but still fuck it up. And on the other hand, a great product can create a market, but that’s more like an exception. 

In conclusion, most of the startups fail because they have not reached product market fit yet, which makes PMF the only thing that really matters. If you haven’t reached it yet, your only focus should be to get it and you should do everything in your power to do it: change team, change product, or even change market, anything.