Did you know that 9 out of 10 startups fail? We are talking about the serious startups. In the not-so-serious type, almost all of them fail. So still why do I want to start a startup?
In the grand scheme of things, it does not matter whether I succeed or not. What matters is that 1 out of 10 startups do succeed. Here we mean success in the changing-life-of-others-for-good sense, not in the absolute economic sense. When you stand for a vision as ambitious as changing the life of others, you want to maximize the chances of humanity getting better and changing for good.
We cannot improve the ratio of startups succeeding. It will always be 1:10. So how do we increase the number of successful startups? By increasing the number of startups.
After a few years we will not be here in this world, but the changes we bring and the ideas we spread will remain. We have the responsibility to become the enablers of a newer and better world. I believe startups are perfect pathways to a better future.
How is the “9 out of 10 fail” stat calculated? I’m interested because I got hired by a startup 2 years ago and its going quite well right now. What’s the time window for a startup to be considered a startup?
I think the most common point of failure is forgetting about all the time administrating the startup is going to take. It’s easy building something great, but using your time wisely is different.
Same question as Mike. I am interested in knowing the souce of 1:10 ratio.
@Mike, the time window is infinity. Reliance calls itself Indias biggest startup
I took the statistics from one of Paul Graham’s famous essays:
Steve Blanks is a serial entrepreneur and professor at Stanford University. He says in one of his essays:
I would argue that a startup has a maximum of 3-4 years before it stops getting called a startup. After that it either becomes a serious (and profitable) business or a failure.
Maybe it just has to do with the way things are done. We’re on our third year, have been profitable from the first year and my two boss still do a lot of administrative work that would be done by professionals in a more mature company. It still feels like a startup.
About the 9/10 stat, it looks like an estimation just to get a broad idea. I also think that by failure, they mean the startup just stops at some point, not that they lost millions of dollars worth of investments. I’m sure a lot of people starting companies try it for a few months, mostly as a side job (which is more of a full-time side job along with a full-time main job) and eventually give up because they’re tired or feel they’re not making progress. The word failure makes it look like the companies went bankrupt which I’m sure is not the case with 9 out of 10 startups.
Niyaz, statistically speaking, if your startup succeeds you have caused the failure of another 9! How can you live with that!
PS: I think you may do well to ignore Paul Graham, but that is personal opinion. Regardless, I of course wish you luck!
Startups may fail but the point is not to stop at that point
Failure is just a temporary step for finally achieving success. I suppose startups are kind of supposed to fail. They are a part of an experiment to see how things will be. It is kind of like prototype software development. Once a certain point is reached, it is time to check why failure happened and reinvent yourself to move in a better direction to achieve success.