Startups fail.

It’s a harsh reality because startups are high-risk propositions. It is not something, however, that gets enough attention because success is celebrated while failure is shunted to the sidelines.

successfulBut failure will likely receive more attention as attracting capital becomes more challenging. When attracting capital is easy, mistakes can be papered over.

For startups that fail, there are many reasons why it happens. According to researchers who studied 193 startup post-mortem blog posts, the leading reasons are “business model not viable”, “ran out of cash and “not enough traction”. 

“No market need” ranked sixth on the list, although I would argue it’s one of the biggest reasons that startups fail.

So why do startups succeed?

In a recent blog post, Crew’s Mikael Cho said one of the biggest culprits are startups that build products that no one needs. “If a product doesn’t solve a problem, no one cares.”

When using a great product, “Every action you wanted to do felt right. Your senses (vision, touch, sound) were in tune with the product. You might’ve said “wow” while using it.”

Marc Andresseen told Forbes that successful startups are “products that become startups”, rather than startups that try to build a product. “Products that become startups tend to do much better overall – [where you have] a founder that has built something, often in an academic setting or on nights and weekends, that is now working, and needs to be turned into a company to continue. Examples of this include Facebook, Google, eBay Yahoo and Netscape.”

Truth be told, there is no formula for a successful startup. Success happens for many, many reasons – it can a matter of having the right product created at the right time, a product that meets obvious needs, a product that simply delights, a product with tangible benefits, and the list goes on.

Often, it is hard to know whether a startup is successful until it is successful. A startup can struggle and then suddenly something magical happens to make it a success. 

In the 15 years founding, working for and consulting startups, I have seen too many startups struggle with products that don’t solve a problem or address a need. Another problem is the product fails to delight or it is difficult to use, even if focused on a problem or need. Despite the best of intentions, there is a failure to execute.

Even though it is tough to tell whether a startup will be successful, you can sense when a startup has potential. In my career, a good example is Sysomos.

When I first started consulting with the social media monitoring company in late-2008, the product was rough around the edges. The user interface was uninspiring, but the product solved a huge problem: tracking social media activity. If I was an investor, I would have quickly invested. 

Sometimes, a startup needs time to find itself. It is focused on a problem but the idea needs time to mature and be embraced. One of my first clients, WineAlign, is a classic example.

WineAlign is an online service that provides Canadians with the insight to make good purchase decisions. At the time, it was a relatively new concept because most people bought wine by looking for good reviews or cute labels (note: animals are particularly appealing for some reason). WineAlign started slowly before it slowly gained more momentum. Now, one of Canada’s leading online wine services. 

There are also startups that pivot because customers use their products in unexpected ways. One of my clients developed a platform to drive corporate social responsibility (CSR) programs. The platform had some traction but the company discovered customers were actively using it as a messaging tool. Based on this insight, the company changed directions.

As a growing number of startups fail, their demises will be analyzed and criticized. At the same time, it is important to focus on why startups succeed. We need to look at the key elements strategically and tactically to give startups a better shot at becoming a viable business. Startups will continue to fail but we will have more insight into why they succeed too.


If you want to jump-start your startup marketing, I can help you make it happen – everything from messaging and brand positioning to strategic planning and content development. Here’s how you can explore the different ways we can work together.

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