If You Want Your Startup to Succeed
You Need to Understand Why Startups Fail!

Why Startup Fail (U.S./Canada) and The Fail-Safe Startup (Commonwealth) explain the causes and consequences of entrepreneurial failure. The two editions, which have identical content other than their titles, provide guidance on how to anticipate and avoid common failure patterns. And, if entrepreneurs do fail, the book explains how they can fail well — in ways that preserve relationships and integrity, and position them to bounce back stronger.

Below, you’ll find an overview of book contents along with links to excerpts, reviews, media coverage, and endorsements from entrepreneurs and investors.

 
 

OVERVIEW

Why Startups Fail is organized into three parts.

Part I, Launching, begins with a chapter outlining challenges confronting early-stage startups, then devotes three chapters to failure patterns that lead to the demise of many early-stage ventures. Each of these chapters begins with a case study of a startup that fell victim to the pattern, then analyzes what went wrong, and finally offers guidance for entrepreneurs on how to anticipate and avoid the failure pattern. The patterns include:

The Diamond-and-square framework, used to evaluate the viability of early-stage startups

The Diamond-and-square framework, used to evaluate the viability of early-stage startups

  1. Good Idea, Bad Bedfellows. Entrepreneurs sometimes identify an attractive opportunity but fail to mobilize the resources needed to capitalize upon it. Deficiencies may include poor founder fit — due, for example, to conflict between cofounders or their lack of relevant experience; other team members’ shortcomings; low value-added by investors; and lack of alignment between the venture’s priorities and those of strategic partners.

  2. False Starts. Many early-stage startups fail after their founders rush their first product to market, skipping upfront research that would determine whether they have identified strong, unmet customer needs and the best solution for those problems. As a consequence, the venture’s first product is likely to miss the mark. The entrepreneur can pivot, but they have boosted their failure odds by wasting time and money on a flawed first product.

  3. False Positives. Success with early adopters can be misleading and give founders unwarranted confidence to expand prematurely — or, if the needs of mainstream customers differ from those of early adopters — head in the wrong direction. Once the mistake is evident, the venture can correct course, but pivots can be costly once resources have been committed.

Part II, Scaling, follows the same format as Part I, but focuses on three failure patterns that afflict late-stage startups, that is, resource-rich ventures that have survived their infancy and now confront the growing pains of adolescence. In Part II, a chapter summarizing management challenges that scaling startups encounter is followed by three chapters describing late-stage failure patterns. As with Part I, each chapter profiles a failed venture and includes advice on how to anticipate and avoid the pattern. The patterns include:

The “Six s” Framework, used to evaluate the viability of late-stage startups

The “Six s” Framework, used to evaluate the viability of late-stage startups

  1. Speed Traps. Hypergrowth can put great strains on a startup, and these strains can prove fatal when growth is not profitable — that is, when the marketing costs incurred to acquire a new customer exceed the profit the venture can expect to earn, over time, from that customer.

  2. Help Wanted. In contrast to Speed Trap victims, some startups manage to sustain product-market fit as they scale, but stumble due to shortfalls in management talent or capital — or both. Delays or mistakes in recruiting senior leaders for mission-critical roles can derail a venture, as can the sudden shifts in investor sentiment that can foreclose access to capital — even for healthy startups.

  3. Cascading Miracles. Some entrepreneurs pursue audaciously ambitious venture concepts that require many years of product development, coupled with breakthroughs on several fronts, for example: radical shifts in customer behavior; the cooperation of established corporations that have benefited from the status quo; government support in the form of subsidies or favorable regulation; or investors willing to commit vast amounts of capital over extended periods. If any requirements are not met, the venture may fail. Consequently, the entrepreneur needs a cascade of miracles to succeed.

Part III, Failing, shifts perspective from the venture—the focus of Parts I and II—to the individual entrepreneur and asks: How can an entrepreneur fail well? The first of two chapters in Part III describes reasons why many founders wait too long to shut down their struggling startup, and then offers guidance for managing a “graceful” shut down — one that preserves the founder’s reputation and relationships. The second chapter gives advice to founders on how they can recover and rebound from their startup’s failure — healing, learning from the experience, and repositioning themselves for what they will do next.

EXCERPTS

REVIEWS

SELECT PODCASTS, EVENTS, AND MEDIA COVERAGE

With a false Start, entrepreneurs — eager to build and launch their product — skip to the end of the british design council’s double-diamond design process and forfeit lots of learning

With a false Start, entrepreneurs — eager to build and launch their product — skip to the end of the british design council’s double-diamond design process and forfeit lots of learning

ENDORSEMENTS

“Tom Eisenmann’s book about failure, an inherent part of startup life, is actually a book about how to succeed. The stories and voices of entrepreneurs at all stages and of all stripes bring his frameworks and playbooks to life. Whether you’re a first-time founder or looking to bring innovation into a corporate environment, Why Startups Fail is essential reading. As Eisenmann writes, ‘Creating something from nothing is a daring act.’ His wisdom and encouragement will give any reader the confidence to take the leap”
— Eric Ries, founder/CEO, Long Term Stock Exchange and New York Times bestselling author of The Lean Startup and The Startup Way

Factors contributing to a cascading Miracles failure

Factors contributing to a cascading Miracles failure

“Launching and scaling a startup is like a game of chess: It requires laser focus, relentless prioritization, and contingency strategies galore. I’ve always wished there was a guidebook to help entrepreneurs avoid common pitfalls on their way to wherever they’re headed. Eisenmann has truly helped illuminated a path to success by shining a spotlight on common startup failure patterns. His insights are invaluable, whether you’re just getting started, or you’re eyeing your endgame.”
— Jenn Hyman, co-founder/CEO, Rent the Runway 
 
“It’s no secret that having a great idea isn’t enough to guarantee your success as an entrepreneur. I see it all the time on Shark Tank: Even the brightest, most driven founders with the most innovative ideas sometimes find themselves going down the wrong path and facing the decision of whether or not to close their business. Why Startups Fail is the perfect roadmap that each entrepreneurs needs to have in their back pocket to help them avoid those heartbreaking choices and continue to grow their business.”
— Daymond John, star of ABC’s Shark Tank and New York Times bestselling author of The Power of Broke, Rise and Grind, and Powershift 
  
“Once you start reading this book, you won’t be able to put it down. Eisenmann has masterfully explained in a clear, thoughtful way why startups fail in a clear, thoughtful way. This is a must-read for any entrepreneur, investor, or startup team member. By avoiding the biggest reasons companies fail, we will see more entrepreneurial success, which is something society needs more than ever.”
— Michelle Zatlyn, co-founder/COO, Cloudflare 

“Failure is the most important element of success. If you are an entrepreneur, a manager, or an employee and you want to understand the DNA of success, Why Startups Fail is a required read. Tom Eisenmann of Harvard Business School does a great job of navigating the false starts, false promises, speed traps and ultimately the cascading miracles of business and career success.”
— Kevin O’Leary, aka “Mr. Wonderful” on ABC’s Shark Tank and author of Cold Hard Truth on Men, Women & Money