The majority of entrepreneurial start-ups don’t survive. Why is that?
The failure rate is substantial: More than 30 per cent close after five years and about 50 per cent after 10 years. The failure rate is so high because, like all business leaders today, entrepreneurs have to make choices with incomplete information, while facing a high degree of uncertainty about the future. But many entrepreneurs also have limited experience, which makes the first two challenges even harder for them.
The number one reason for failure is that start-ups bring a product or service to market that nobody wants. Successful entrepreneurs have to do a lot of experimenting, and that means making a lot of mistakes. Society still perceives failure as a bad thing, and it can be humiliating. The fact is, some entrepreneurs learn from their mistakes, and some do not. The latter group are, fail often, but fail well. And ‘failing well’ means learning from the failure.
