According to statistics, 2 out of 10 new businesses fail in their first year (Bureau of Labor data), and 9 out of 10 startups fail (Startup Genome data). If the project has venture support, then the indicators are slightly better, only 7.5 out of 10 fail.
What is a startup and why is it a risky undertaking
In the broadest sense, a startup is a business in its early stages of development. But this definition is too general and does not fit all situations. Startups have two important characteristics:
Innovation. The entrepreneur creates completely new technologies, products or services on the market, experiments and tests assumptions that have not been implemented before; Scalability. A project can grow exponentially rather than linearly – the larger it gets, the faster it grows.
At its core, a startup is a business experiment that tests assumptions that are obviously not always true. This explains why they are relatively more likely to fail and close. The more innovative the project, the more likely it is to fail.
The infographic below shows the most likely causes of startup failure.
Infographic brought to you by Wrike easy to use project management software