Why Startups Fail

Tom Eisenmann

Why Startups Fail



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Why do so many startups fail? Harvard Business School professor, Tom Eisenmann, has launched a lengthy research project to find the answer to this very question. In Why Startups Fail, he reveals his findings, namely the six key mistakes that lead to the majority of these failures. Eisenmann offers effective models to assess when a startup is most vulnerable and likely to fall victim to these mistakes, and provides strategies and tactics to help avoid them. For founders at any stage of their entrepreneurial journey, Why Startups Fail is an essential guide to avoiding failure, and provides a roadmap to chart a path towards startup success.

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Analysis and key concepts


Most startups fail, but failure can be predicted with tools, such as the ‘diamond and square’ framework


The three mistakes behind early stage startup failure: good idea/bad partners, false starts, and false positives


The “Six S” framework for identifying scale-up mistakes: Speed, Scope, Series X, Staff, Structure, and Shared Values


The three most common mistakes in the scale-up phase are the ‘Speed Trap’, the ‘Help Wanted Trap’, and the ‘Cascading Miracles Challenge’


Entrepreneurs are often given advice, which could actually harm their business, such as: Just do it! Be persistent! Bring passion! Grow! Focus! Be frugal!




Take-home message

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Many useful tips to:

  • Understand the six main reasons why startups fail.
  • Discover the most difficult decisions startup founders have to make.
  • Learn how to maximise the chances of entrepreneurial success.

Tom Eisenmann is a professor of Business Administration at Harvard Business School, as well as the faculty chair of the Harvard Innovation Labs, and faculty co-chair of the HBS Rock Center for Entrepreneurship, the Harvard MS/MBA Program, and the Harvard College Tech Fellows Program. He is also a director on the board of Harvard Business Publishing. Over more than two decades at HBS, he was instrumental in shaping generations of founders of several unicorns, including Stitch Fix, Cloudflare, Oscar Heath, and Zynga. Eisenmann graduated with anMBA from Harvard University, then worked for 11 years at McKinsey & Company as co-head of the Media and Entertainment Practice, and later received his PhD in Business Policy, also at Harvard.

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