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Why Startups Fail: And How Yours Can Succeed

Book Description

For the want-to-be entrepreneur thinking about taking the leap, the boot-strapped entrepreneur trying to energize a business three or four years in, and the venture-backed entrepreneur trying to scale, Why Startups Fail shows you the key mistakes new ventures make—and how to avoid them. Nearly everyone has an idea for a product they could build or a company they could start. But eight out of 10 new businesses fail within the first three years. Even only one in ten venture-backed startups succeeds, and venture capitalists turn down some 99% of the business plans they see. The odds appear to be stacked against you! But entrepreneurs often make the same avoidable mistakes over and over.

Why Startups Fail can help you beat the odds and avoid the pitfalls and traps that lead to early startup death. It's easy to point to successes like Apple, Google, and Facebook. But the biggest lessons can come from failure. What decisions were made, and why? What would the founders have done differently? How did one company become a billion-dollar success while another—with a better product and in the same market—fail? Drawing on personal experience as well as the wisdom of the Silicon Valley startup community, serial entrepreneur, venture capitalist, and blogger Dave Feinleib analyzes companies that have come and gone.

In short, powerful chapters, he reveals the keys to successful entrepreneurship: Excellent product/market fit, passion, superb execution, the ability to pivot, stellar team, good funding, and wise spending. In Why Startups Fail, you'll learn from the mistakes Feinleib has seen made over and over and find out how to position your startup for success. Why Startups Fail:

  • Shows venture-backed startups and boot-strappers alike how to succeed where others fail.

  • Is equally valuable for companies still on the drawing board as well as young firms taking their first steps.

  • Takes you through the key decisions and pitfalls that caused startups to fail and what you can learn from their failures.

Covers the critical elements of entrepreneurial success.

What you'll learn

  • Avoid the key mistakes that cause startups to fail

  • Pitch, raise money, and recruit

  • Find the right market

  • Build world-class products that people will use

  • Outrun the competition

  • Know when to stay the course and when to pivot

Who this book is for

Why Startups Fail is for the aspiring entrepreneur who wants to avoid the key mistakes that have caused hundreds of thousands of companies to fail. Why Startups Fail will appeal to venture-backed technology entrepreneurs. It will also appeal strongly to boot-strappers and those who have, by hook or by crook, survived their first three or four years and are starting to hit speed-bumps. It's an excellent choice for entrepreneurs who want the know-how to make themselves and their companies successful for the long term.

Table of Contents

  1. Title
  2. Dedication
  3. Contents
  4. About the Author
  5. Introduction
  6. PART I: Market, Product, and Entrepreneur
    1. CHAPTER 1: Poor Product-Market Fit: Pivot Your Way to a Successful Launch
      1. Product-Market Fit
      2. Big Markets
      3. Ride the Wave
      4. Great Product, Bad Market
      5. Structural Issues
      6. Finding Fit
      7. Reaching Your Market
      8. When to Pivot and How
      9. Capitalizing Too Early
      10. Pivots That Worked
      11. Summary
    2. CHAPTER 2: Bad Products: Less Is More
      1. Falling Victim to Product Blindness
      2. How Bad Products Get Built
      3. Failure to Focus
      4. Too Much Friction to Achieve Adoption
      5. Products That Don’t Acquire More Users
      6. Simple, Universal, and Viral
      7. The Magic of Product Chemistry
      8. Don’t Ship Too Early or Too Late
      9. Products That Don’t Scale
      10. Summary
    3. CHAPTER 3: The Missing Entrepreneur: Market Visionary and Product Picker
      1. An Entrepreneur with a Capital E
      2. Where’s Marc?
      3. An Entrepreneur’s Quest: The Big Idea
      4. Picking the Right Product for Your Market
      5. Teams Without a Clear Vision Fail
      6. Money Doesn’t Help When You Don’t Have Users
      7. Hire for Operations
      8. How to Hire Great People
      9. Always Act Like an Entrepreneur
      10. Focus on What You’re Great At
      11. Starting vs. Leading
      12. Fail Fast
      13. Summary
  7. PART II—Sales and Marketing
    1. CHAPTER 4: Investing in Sales and Marketing Too Early: Know When to Spend—and When Not To
      1. The Real Cost of Spending Too Early
      2. Ratcheting Up the Burn Is Easy—Bringing It Down Is Difficult
      3. Don’t Mistake a Lack of Product-Market Fit for Poor Execution
      4. Understand the Traction Curve
      5. Create Unique Value
      6. Too Late for Hope, Too Early for Traction
      7. Are You Ready to Throw Gas on the Fire?
      8. Get Out There and Sell
      9. Summary
    2. CHAPTER 5: Losing Money on Sales: Put Sales Leverage to Work for You
      1. When Customers Cost More Than They’re Worth
      2. Ultimately, It’s About Acquisition
      3. Understand Customer Lifetime Value
      4. Remember: Products Are Bought, Not Sold
      5. Fight Inherent Bias
      6. Reduce Sales Team Turnover
      7. Get Sales Leverage
      8. Making the Engine Hum
      9. Summary
    3. CHAPTER 6: Invisible Startups: Market Your Startup Without Incinerating Cash
      1. Startups You’ve Never Heard Of
      2. Product Innovation
      3. Viral Marketing
      4. Social Media
      5. Buzz
      6. Search
      7. Mobile
      8. Brand
      9. Summary
  8. PART III—Execution
    1. CHAPTER 7: Failing to Communicate: Words Matter
      1. Communicating Your Vision
      2. Setting Expectations
      3. Managing Board Meetings
      4. Delivering Bad News
      5. Delivering Good News
      6. Communicating with Your Team
      7. Communicating with Customers
      8. Communicating Your Story
      9. Summary
    2. CHAPTER 8: Not Getting Started: How to Get Your Company Off the Ground
      1. Making the Leap
      2. Build a Big-Idea Company—Not a Company of Ideas
      3. Surviving a Lack of Capital
      4. Control Your Own Destiny
      5. Building the Team
      6. Users and Customers
      7. Location, Location, Location
      8. Summary
    3. CHAPTER 9: Failing to Execute: Lessons on Growth
      1. Lack of Execution
      2. Startups Are Fluid Organizations
      3. Under-Resourced or Over-Resourced?
      4. Failing to Manage Cash
      5. Executing Early vs. Executing at Scale
      6. Hiring Help to Scale
      7. Know Your Numbers
      8. The Goal: Repeatable, Profitable Acquisition
      9. The Myth of First-Mover Advantage
      10. How the Late Entrants Won
      11. Become the Market Leader
      12. When the Market Outruns You
      13. Summary
  9. PART IV: Capital and Liquidity
    1. CHAPTER 10: Pitches That Fail: Perfect Your Pitch
      1. Pitch the Right Investors
      2. Pitching Isn’t Free
      3. Investor Motivations: Greed and Fear
      4. Process Matters
      5. Vision First, Execution Second
      6. Spell It Out
      7. You Are the Product
      8. Perfect Your Pitch
      9. Presentation Failure
      10. Expect Due Diligence
      11. Support Your Sponsor
      12. Understand Partner Meetings
      13. Summary
    2. CHAPTER 11: Managing Liquidity: Get Paid for Your Work
      1. Liquidity Events
      2. Why Acquisitions Fail to Go Through
      3. Getting the Deal Done
      4. Failing to Get Paid
      5. Secondary Markets and Interim Liquidity
      6. IPOs
      7. When Your Company Is the Product
      8. Summary
    3. CHAPTER 12: From Failure, Success: Mistakes: The Stepping Stones to Startup Victory
      1. Many Motivations Fuel Entrepreneurship
      2. The Myth of Working for Yourself
      3. Friction Leads to Failure
      4. Bridge the Value Chasm
      5. Personal Health
      6. Ways to Avoid Failure
      7. Fail Fast
      8. Summary
  10. Index