Startups primarily fail because the vision of the founders, leaders and the team does not match reality. That's why we continue with our projects independent of market fit, when the technology isn't really ready, or there are clear competitive disadvantages. This deck introduces the idea of matching vision with reality, and outlines seven classic ways that startups fail.

1. Why Startups* Fail
*and other tech projects
Seven Fail Modes. And Some Successes.

2. successes (but nobody bats 1.000)

3. reasons for failure (self-reported)
source: cbinsights cbinsights.com/blog/startup-failure-post-mortem/

4. vision reality
reality will always win
most failure = non-alignment with reality

5. seven failure modes
➡ fails 1-5 : non-alignment with the real world
➡ fails 6 &7 : execution

6. To see what is in front of one's nose needs
a constant struggle
“
George Orwell
(would have enjoyed the Lean Startup)
“

7. classic fail 1 : too early
“This technology is so cool…”

8. too early : symptoms
the long-term strategy is great
but you’re doing a lot of persuading (a lot)
a few enthusiastic early adopters (head-fake)
obvious practical objections are waved away
traction just doesn’t happen

9. too early : why
in love with the theory, blind to the practicalities

10. too early : what to do
➡ plan and fund for a long (long) haul
➡ find a piece that will work (really work) now
➡ find a niche that will work (really work now

11. classic fail 2 : too late
hoping one or two “plus” features will move a market
hoping a giant grizzly won’t notice you’re there
assuming that you’re a bigger grizzly
“We can compete with Google because…”

12. too late : why
it’s probably a good idea, except for the competition
hubris: you’re going to disrupt a giant
thinking maybe you’re get acquired (maybe you will)

13. too late : what to do
➡ move really, really fast (see also: grizzly)
➡ be really massively disruptive (hard)

14. classic fail 3 : adhd
there is no one customer
everybody is really busy: product teams get burned
frequent bursts of optimism at “the new start”
the strategy gets increasingly convoluted
“we could be a <insert new idea here>”

16. adhd : why
disappointment of seeing reality meet the vision
fear of commitment to one goal
fear of letting go of a direction that has failed

17. adhd : what to do
➡ commit, and then cut stuff. yeah. that’s hard
➡ do one thing really well

18. classic fail 4 : the Big System
“we’ll get the architecture right this time”
the “why” explanations are convoluted: often justified by
one feature, not by real user need
there are too many engineers
timescales keep drifting out into the future

19. the Big System : why
we are really attracted to “doing it right”
theory of what “a complete system” overrides practicality

20. the Big System : what to do
➡ ewww. tough one. just stop.
➡ isolate the customer need. address that. only.

21. classic fail 5 : not listening
customer responses are ignored or “re-interpreted”
Lean Startup, or anything like it, is not used
Lean Startup is kind of used: results are ignored
“we’ll put another feature in”

22. not listening : why
we’re gonna build what we’re gonna build
we’re attached to our creativity

23. not listening : what to do
➡ well, you could build it - you probably will anyway
➡ or: start listening. it’s hard. you don’t want to hear it.

24. classic fail 6: oops, forgot the marketing
there’s no marketing person in charge of marketing
no spreadsheet exists showing cost of user acquisition
“our investors will tweet this”
“techcrunch is going to love it”

25. oops, marketing : why
we love our products. surely other people will, too!
we see lots of success out there. surely it must be
easy!

26. oops, marketing : what to do
➡ get expert help
➡ include a marketing plan in your runway (time and $)
➡ do this before you write any more code

27. classic fail 7: damn thing doesn’t work

28. damn thing : symptoms
two steps forward, at least one and a half back
bugs, performance issues
demos are a nightmare
continuous schedule overruns

29. damn thing : why
the tech is beyond (at least some of) the team
changing this means facing hard people issues

30. damn thing : what to do
➡ manage the hell out of it
➡ change (at least some of) the team (do this)

31. successes
➡ small, committed, excellent teams
➡ real world alignment : strategy/timing/customer fit

32. enjoy building your vision
joedunn@cloudbreak.com
@startup2020
cloudbreakleadership.com