Most common reasons for startup failure revealed

Image credit: Failory

There are lots of things that go into making a startup a hit, but what’s the most important ingredient for success? That’s hard to say, but we may have an answer for the key to avoiding failure.

As this graphic from Failory shows, a lack of product-market fit was the most common reason for startup failure brought up across over 80 interviews with failed founders. While the interviews were qualitative and therefore didn’t provide actual statistical results, they bring up interesting insights nonetheless.

See also: Sense checking for product-market fit in 2023

For example, it may surprise many to learn that only 16% of the failed founders blamed financial problems for their business’ closures. Meanwhile, failing to find product-market fit was cited more than twice as often at 34%.

Marketing problems also took up a hefty share of the failure pie, with 22% of the founders bringing it up in their interviews. Meanwhile, team or personnel issues contributed to 18% of the startup failures.