Why do start-ups fail?

Feb 18 2013

Mashable's infographic gives several examples of Web startups, that have either failed or have been successful. The reasons why they failed can be generalized to different areas, even when (in our case), the product answered the companies needs.

Here are some reasons we identified:

  • No uniqueness: being the only one to offer a particular service is one of the key ways to be successful;
  • Bugs at launch: bugs make a bad impression. Sometimes, details make the difference. But if the product is unique and the users are addicted, the service/product can continue to evolve. For instance, Twitter. Do you remember the "Twitter whale"? (at XWiki SAS, we have "Skol") ? Today, Twitter is famous;
  • Lack of innovation: being a pioneer and a precursor (but not too much) is a good point; XWiki is the first second generation wiki! It is a wiki and a development platform at the same time.
  • Lack of evolution: the product / service must continually evolve to meet the needs / expectations of customers or to be closer to market trends. This is what we do every day, with the help of the Open Source community
  • Acquisition of the company by a larger one: the acquisition of a structure by another one may lead to several difficulties: re-allocation of employees to other features, no more support and/or development...

According to us, this last reason is particularly interesting, because it is unfair to users who believed in the product. On this topic I invite you to read the article written by Ludovic Dubost: Tech companies and their buyout.

Do you see other reasons?