An entrepreneurship professor explains why studying startup failure matters. After mentoring a promising student venture that collapsed despite customer demand, they spent eight years researching failed founders and investors, discovering that failure causes are far more complex than simply the opposite of success. Common culprits include growing too fast and burning through cash.
Chapters
Let's start at the very beginning. Why do you want to potentially be labeled the professor of failure? Why does studying failure mean so much?
Yeah, it has scared off a few founders who might otherwise be looking for advice. So, I mean, there's two ways to answer this, which is why should an aspiring entrepreneur learn about failure? And, you know, the fact is the drivers of failure aren't simply the photo negatives of the drivers of success. There's— it's complicated, right? To succeed as an entrepreneur, you probably have to grow, but boy, if you want to find a leading cause of startup failure, it's growing too fast. So studying failure is important, but personally, why I started, it goes back to a team that I worked with. They were students of mine, and a year after graduation launched a venture. I was an investor after, after they graduated, had a lot of confidence in the team, and they raised a million-dollar seed round, wanted to raise a million and a half. That was part of the failure story, and got the business going, validated demand with the very best lean startup techniques we can teach them, And sure enough, after they launched, the demand was there and repeat purchases were there. Took them longer than they expected to get the operations under control, so they were burning through cash. And while they were making progress, they weren't making enough progress and shut down after a year. And I could point to a lot of things that went wrong, but I couldn't pinpoint the cause or the causes of failure. And that was a little disconcerting. Here I was, a supposed expert on entrepreneurship, and In our field, depending on how you define a startup and how you define failure, two-thirds, three-quarters, 90% of startups fail. And so it's a really important phenomenon, and I was a failure at explaining failure. So this goes back 8 years, and so I set out to read everything anybody had ever written about startup failure, practitioners and academics, and interview lots and lots of failed founders and the investors who backed them, and do the survey work, and write the cases that form the backbone of this book. So it only took 8 years to pull it all together. Things move a little more slowly in academia than they do in startup land.
