Startup Statistics

The data tells us that the world of startups is fraught with peril. The strength of founding team and a clear direction are critical. A stellar CTO is crucial for tech startups.

  • Across all industries, startup failure rates seem to be close to the same.
  • About 90% of startups fail.
  • 10% of startups fail within the first year.
  • The number one reason why startups fail is due to misreading market demand — this is found in 42% of cases.
  • The second largest reason why startups fail (29% of cases) is due to running out of funding and personal money.
  • Other notable cases of failure are a weak founding team (23%) and being beat by competition (19%).
  • Startup owners can spend around 40% of their working hours on tasks that do not generate income such as hiring, HR tasks, and payroll.
  • Two founders increase the odds of a startup’s success with 30% more investment, three times the customer growth rate, and a higher likelihood the startup will not scale too fast.
  • Startup failure is most common when the company has 11–50 employees. – should we stop at 10? 🙂
  • The largest challenge that fintech startups face is the cost of customer acquisition.

Other contributing factors I have personally seen in struggling startups:

  • Run out of funding
  • The vision is not clear.
  • Objectives are not clear.
  • Priorities are not set.
  • Processes are not prioritized to support and foster growth.

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