Start Assessment

The Research: Why Startups Fail

We've analysed hundreds of studies and distilled research from Harvard Business Review, CB Insights, Exploding Topics, and leading startup experts. Here's what we found.

All advice, tools, insights are distilled from:

90%

of startups fail globally, with 10% failing in year one and 70% failing in years 2-5.

— Startup Genome, 2025 | Exploding Topics, 2025
2/3

of startups never show a positive return on investment.

— Harvard Business Review, 2021

The Top 10 Reasons Startups Fail

1. Lack of Product-Market Fit (42%)

Building something nobody wants. Not solving a real problem people will pay for.

2. Running Out of Cash (29%)

38% run out of capital or fail to raise funding due to weak foundations.

3. Wrong Team (23%)

Shareholder disagreements, unclear roles, no founders' agreement with vesting. 73% of conflicts stem from unclear ownership.

4. Overwhelming Competition (19%)

Inability to differentiate or keep pace with innovators. 76% of consumers prefer brands with clear differentiation.

5. Pricing/Cost Issues (18%)

Wrong pricing model, unsustainable unit economics, or underestimating costs.

6. Poor Product (17%)

User-unfriendly, bad timing, or failing to iterate based on feedback.

7. Business Model Failure (17%)

No clear path to profitability or sustainable revenue model.

8. Weak Marketing (14%)

Great product, but nobody knows about it. Ineffective customer acquisition.

9. Ignoring Customers (14%)

70% of startups ask wrong questions to wrong people. Skipping customer discovery leads to flying blind.

10. Scaling Prematurely (13%)

74% scale without adequate systems or processes in place.

Built on why startups fail,
designed for how they succeed.

The Good News

With the right approach, you can increase your chances of success despite the odds.

By understanding common pitfalls and having a plan in place for how to mitigate them, entrepreneurs can increase their chances of creating successful businesses and reaching their goals.

— HubSpot, 2023

What This Means for You

Most startup failures are preventable. The issues aren't mysterious—they're well-documented and researched. The problem is that this wisdom is scattered across the landscape.

Sova consolidates it all. We've distilled the evidence and unified it into one holistic system matched to your specific situation.

You don't need to spend $150-$450/hour on consultants or give up 5-15% equity to an accelerator. You need a clear diagnosis and evidence-based roadmap.

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