What’s the number one reason startups fail?
Some studies find it’s a lack of product fit. Others say it’s because companies run out of cash.
But a common reason startups fail is because the founder doesn’t want to run it any more, and he or she decides to quit.
Bryan Goldberg co-founded Bleacher Report and sold it for more than $US200 million to Turner. He now runs Bustle, a media site that targets women and earned 11 million monthly readers within his first year. His recipe for startup success is pretty intuitive: Just stay alive.
If you keep your startup alive long enough, you may break through a traffic barrier, earn traction, or outlast a competitor and gain industry recognition.
“Winning in startups, and in media specifically, is very much about refusing to give up. Resilience matters,” Goldberg told Business Insider in an email. “It takes a long time for a media publication to gain mindshare with the general public — in the case of Bleacher Report, it took five years until people at parties or networking events told me, ‘Yeah, I know you guys.’ That’s a long time for a startup, especially when each day brings growing pains, financial complexities, and potential fire drills. But you have to stay alive…Tough, nimble, spirited media startups are going to thrive, so long as they stay focused on their mission and have the patience to endure.”
Paul Graham, the co-founder of startup incubator Y Combinator, calls this refusing-t0-die mentality being a cockroach.
In 2008, when he let Airbnb into Y Combinator, he told the co-founders that he appreciated their hustle (Airbnb used to sell boxes of cereal to fund itself when no investors wanted to give it cash.)
“[Paul] was basically looking for cockroaches,” Airbnb CEO Brian Chesky said at a SXSW talk. “He said we were cockroaches and that’s why he funded us.” Now Airbnb is valued at about $US10 billion.
Graham believes failure is often a founder’s choice. They could choose to keep their startups alive — they just don’t want to.
“You should shut down the company if you’re certain it will fail no matter what you do. Then at least you can give back the money you have left, and save yourself however many months you would have spent riding it down,” Graham wrote in a recent blog post. “Companies rarely have to fail though. What I’m really doing here is giving you the option of admitting you’ve already given up.”