Home – New Forums Starting your journey 90% of startups actually Fail

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  • #978860
    LifeIsABeach
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    Eeks not what you want to hear on this forum. But those are the hard cold facts. What makes a Bill Gates, Oprah or a Mark Zuckerberg?

    How can we succeed more and fail less?

    Here is an article which was posted to me

    http://tinyurl.com/76ethc9

    It really makes interesting reading.

    #1110042
    bluepenguin
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    90% of startups actually Fail

    Do you have any proof of this?

    #1110043
    LifeIsABeach
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    bluepenguin, post: 122551 wrote:
    Do you have any proof of this?

    Actually there is. There are research groups who look at how many small businesses are still alive after 2-3 years and compare that with the number of startups.

    #1110044
    JohnTranter
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    LifeIsABeach, post: 122559 wrote:
    Actually there is. There are research groups who look at how many small businesses are still alive after 2-3 years and compare that with the number of startups.

    4.13 Business failure rates are not as high as is commonly believed. Research undertaken by the Productivity Commission in 2000 indicated that around two-thirds of businesses survive the first five years of operation, and that the majority of businesses that cease operation do not close because of ‘failure’ but for reasons unrelated to their financial position. The research showed that only around 2 per cent of businesses cease operations each year because the owners, while solvent, cannot secure a sufficient return, and only 0.5 per cent of businesses cease operation each year due to insolvency.

    http://www.financialmilestones.com.au/myfiles/uploads/Scoping%20Study%20of%20Small%20Business%20Tax%20Compliance%20Costs%2012-07.pdf

    #1110045
    TheGoldenGoose
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    I find the whole thing a little depressing really! Let’s focus on the positives, moving forward together in business.

    #1110046
    yourvirtualboard
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    Fail is such a strong word and for some reason one we all seem to want to avoid.

    In compiling stats business that started but no longer trade get lumped into the failed category – the simple truth is that when all that’s required to be in business is an ABN, many get one and “are in business”. For some reason it’s a romantic notion to so many to be in business or a business owner, after all it’s only buying something and then selling it for more or having a skill that you can sell. How hard can it be? But over time when the reality of what it means to be in business sinks in many realise that it’s not for them and would prefer to be employed again and rather than fail, simply decide it’s not what they wanted to do and they move on. Not everyone is suited to running a business just as not everyone is suited to any other vocation and leaving something you don’t feel suited to is a wise decision rather than a failure in my eyes.

    #1110047
    Steve_Minshall
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    A much more meaningful statistic would be how many start ups end in bankruptcy? I would guess not many.

    Having a go and then winding up the business is not a failure it is a lesson.
    My first four (part-time) businesses were ‘lessons’.:o

    #1110048
    yourvirtualboard
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    Steve_Minshall, post: 122617 wrote:
    A much more meaningful statistic would be how many start ups end in bankruptcy? I would guess not many.

    Having a go and then winding up the business is not a failure it is a lesson.
    My first four (part-time) businesses were ‘lessons’.:o

    An excellent way to look at it – I call these lessons school fees because there’s usually a financial implication as well.

    Most really successful business people have a few attempts along the way.

    #1110049
    adrian
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    If failure means liquidating all assets, with investors losing most or all the money they put into the company, then the failure rate for start-ups is 30 to 40 percent, according to Shikhar Ghosh, a senior lecturer at Harvard Business School who has held top executive positions at some eight technology-based start-ups. If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent. And if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90 to 95 percent.

    Harvard Business School

    I think this all comes down to definitions though. Is a ‘Start up’ different to a ‘Business’? And if so, how? Also, the HBS stuff above only accounts for startups with investors. If you include startups that never got investors, the number would be WAY higher. I’d guess around 99.9% of people that try to get a start up running never do. Lots of false starts and wasted time.

    To me, ‘Startup’ means a solution looking for a problem. If a business starts up addressing an audience who want to pay to have a problem solved, they’re just called a business…

    #1110050
    Johny
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    I think this all comes down to definitions though.

    I agree, but not in terms of start up compared to business. In terms of what the word “fail” actually means.

    Fail is such a strong word and for some reason one we all seem to want to avoid.

    Because using the word “fail”, ………well denotes failure.

    If I have a business and it ceases because it went broke or because it didn’t meet my expectations or it was not successful in terms of what I had planned, then it was a failure.

    I fall down, I get up again, I fall down, I get up again, I fall down, I get up again,…then I walk, having learnt some stuff along the way.

    Failure leading to success. And as long as I keep getting up again there is no reason for it to be a bad thing.

    #1110051
    ray_223
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    1 in 10 succeed!
    Sounds like good odds!

    #1110052
    Burgo
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    I’m a failure, I’m a Failure I”M A FAILURE

    Hangon a minute

    I’m retired I’m retired YES I’M RETIRED

    I could still fall into the category of failure, cause I’m a failure at retirement.

    #1110053
    Anonymous
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    yourvirtualboard, post: 122619 wrote:
    An excellent way to look at it – I call these lessons school fees because there’s usually a financial implication as well.

    Most really successful business people have a few attempts along the way.

    If we look at people like Thomas Edison and Henry Ford, they both failed a number of times before becoming successful. So Harry is right these are lessons on the road to success.

    #1110054
    jamee88
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    This cannot be true, the thing is that start ups are the most important part of life cycle of the business and those who starts the business they are actually risk takers and the most important area for any business is start up so it is very vague statement to be mentioned or referred.

    #1110055
    NathanB
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    Did anyone see the 60 Minute segment on APPs last week? I hear start up App companies have almost a 100% success rate.

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