Startup is 💀
Startups fail, and most likely yours will too. Unless ...
Startups fail, and most likely yours will too.
Not trying to be mean, but it’s in the numbers. There are hundreds of reasons why startups don’t make it, but there are a few you can control. Here are the things that’ll most likely kill your startup if you don’t get a handle on them.
TL/DR
Wrong co-founder or rushing to find one? Disaster. Take your time or go solo.
Building in isolation will lead to failure. Get feedback from the right audience early and from non-tech people if you are building a non-tech solution.
VC money is for growth, not survival or to build your MVP (in most cases). Bootstrap if you can.
Wrong motivations lead to quick burnout. Do it for the right reasons.
Bad finance management will kill your startup faster than anything else. Plan ahead, or it’s over.
1. Choosing the Wrong Co-Founder (Or Having One at All)
People love to say, "You need a co-founder." It’s like startup law or something. But how many startups have failed because co-founders couldn’t agree on vision or money? A lot. Sometimes it’s better to go solo.
Just because people say you need a co-founder doesn’t mean it’s true for everyone. If you really want one, take your time. Don’t rush into it. Get involved in startup communities, check out groups like OnDeck or Antler, and meet people who complement your skills. Don’t just grab anyone because they’re available. Or, if you’re comfortable handling all aspects of the business, go solo and avoid the drama.
2. Building in Silos
I’ve seen this a lot, especially in the indie hacker community. Builders start with an idea, keep their heads down, and build in isolation. Then they wonder why no one cares about their product. You don't start with the idea, start with the solution. Ideas don't matter
How many people are trying to build the next “Product Hunt alternative” because they think Product Hunt is not working? But maybe it’s broken because it’s not solving a problem anyone actually cares about or not too much right now.
Building a solution to a non-existent problem is what? ...
Also, stop talking in silos, go outside touch the grass and talk to tour target users. I’ve seen communities where it’s all technical talk, but no one’s letting in real users while they are building products either B2B or B2C and not just dev,tools.
If you don’t let your users give you feedback, how will you know if your product solves a real problem? You need to learn from people outside your bubble, or your ego will kill your startup before it even gets going.
3. Relying Only on VC Money
Money, money, money. VC money is for one specific reason: growth and marketing. Once you have a good product or an idea with tremendous provable market potential, that’s when the VC money comes in. They want to get 10x for every 10 cents they put in. Can you make that happen? Can you make that happen in the fund's lifecycle of 5-10 years max? If the answer is no, don’t talk to them.
Angels are a bit different, but they are high maintenance. Keep the cap table clean as long as you can—every person on it is a new "boss." There are great VCs, but there are terrible ones that will drive you crazy and crush the idea of "startup freedom" in a snap.
The reality is most startups don’t need VC money at first. Most products should be able to be built with either savings or setting some cash aside. Or, if you’re technical, build it yourself. Just do it with a co-founder who’s the opposite of you, or solo if you’re savvy in all aspects of business.
4. Doing It for the Wrong Reasons
A startup should solve a problem. If you want to sell anything, there should be someone on the other side willing to pay for it. This is basic stuff, you know it. Yet, how many start something to make their parents proud, to be in Forbes 30 Under 30 (Hi Sam!), or just to make bank? And in reality, it’s the opposite—it takes time and effort, and in most cases, will bankrupt you because you suck at finance. Most do.
You might think you don’t, that you’ve got it covered, that GPT has your back. But there’s nothing like human experience, living through things. Listen to those who know in all aspects, but take most of it with a grain of salt. Do it because you have a strong belief in something, a solution—even if that solution is independence.
5. Bad Finance
I'll say it again. Most founders suck at finance, you might think you don’t, but probably you do (in Robert De Niro's voice).
I’m gonna add my Han’s disclaimer here: This is not financial advice. This is a very strong, well-informed opinion after working for 25 years in finance, accounting, tax, and legal. Founders are terrible at finance—great at building and vision, horrible with anything related to finances. Except for a tiny 1% that I’ve met and had the pleasure to work with.
Your accountant won’t save the day.They crunch numbers after the fact. Magic won’t do the numbers. Finance is not only doing your taxes or accounting—it’s about looking at your business’s snapshot in the future, planning costs, budgeting, and forecasting versus what you expect the startup to be. This is very important as you grow.
Finance isn’t just about taxes or bookkeeping. It’s about forecasting and planning. How does hitting 1,000 customers affect your AWS costs? What about payroll? Do you even know? Most founders don’t, and that’s why they fail. Use tools like EvryThink to help you plan ahead. If you don’t, your startup will fail—and not because of your product, but because of your finances.