The Real Reason Why Startups Fail


Well one of the eternal questions in entrepreneurship is why do so many startups fail here with some answers. Is tom eisman. Who's the howard h stevenson professor of business administration the harvard business school and faculty co chair of the arthur rock center for entrepreneurship thomas. Authored more than one hundred s case studies and his writing has appeared in the wall street journal. Harvard business review in forbes. He's the author of a new book called. Why startups failed tom. Welcome to the show area. Thanks for having me well. How have you been surviving through the pandemic. just great it's A great time to write a book and it turns out. I know i'm ready to yeah plenty of quiet time. So why do startups fail. That's the first question we gotta start with sure Startups fail because they run out of money and they can't raise more Which i guess isn't very helpful. It's like the coroner saying This this person died from loss of blood and so it is because i always say that every business fails because they run out of money and i think that's important because so many entrepreneurs don't value cash flow. They keep looking at sales. So i think it is instructive especially protect startups. Where where there's a tolerance for For losing money under the expectation that if you can big enough you're to make some money but but boy If you get in trouble along the way and you can't raise the next round when you when you're burning through cash you you're on the way failure or you don't listen to customers actually help fund your business in those smaller things that perhaps just a service oriented company exactly

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