
Startup Failure by Industry - billconan
http://www.statisticbrain.com/startup-failure-by-industry
======
minimaxir
> Source: Entrepreneur Weekly, Small Business Development Center, Bradley
> Univ, University of Tennessee Research

Er, there aren't links to the sources. You can't just take someone else's data
randomly, assert as truth, and not show its original form. (unless said
original form has restrictions on redistribution)

------
kfk
It's interesting to notice that 9 of the causes of failure are due to poor
financial controlling (as in terrible or absent financial controller/manager).
Which does confirm one of my thoughts about startups: they need huge margins
to offset all the poor financial planning and accounting mistakes they do.
It's not a bad strategy for many, but it is deadly for some. It's a pity given
some solid financial controlling advice is not that expensive or hard to get,
I believe.

~~~
simonswords82
Cashflow forecasting at the start of any business venture is almost always
guesswork.

The best defence against lack of predictable income for startups is to simply
keep overheads to the absolute minimum. This buys the longest runway and
increases the chances of survival.

~~~
kfk
Right, but you have to spend money at some point. Once you do, you need to
make assumptions on how the future will look and keep track of things. If I
assume a monthly OpEx of 100, somebody has to keep track of that number, the
worst that can happen is to have an increase to say 120 and nobody noticing or
thinking it's worth notice...

------
genericresponse
I'm really interested in the underlying source data and sample groups. Based
on the article, I'm unclear if these are actually startups or just small
businesses.

~~~
Naritai
From the point of view of most economic studies, there is no difference. For
them a business founded for the purpose of making is a startup, be it a
plumbing business or an on-demand food delivery service.

------
carbocation
Education and Health are lumped together? These are vastly different.

------
busterarm
So businesses that require you to be extremely well capitalized to be in them
(finance, real estate, mining), or are extremely well capitalized through
subsidy (education, health, agriculture), are more likely to be in business
after 4 years?

Got it.

------
mkagenius
It talks about failure and didn't care to define what that exactly meant?
Going bankrupt? Closing down the business with very less profit? What does
failure in the 9th and 10th year look like?

~~~
danielharan
+1

If you sell your company after 3 years or get a job that's better than
consulting, the business entity is no longer operating - though that may not
be a "failure" for the founders and employees.

Meanwhile there are zombies that have been draining founders and burning out
employees, yet are counted as a success because the business is a going
concern.

~~~
sumedh
> If you sell your company after 3 years

How exactly is that a failure?

~~~
bluejekyll
That's the commenters point. We don't know what data was sourced for
"failures"

------
pnwhyc
This information is very vague. I'd be interested to see how they grouped the
startups into those categories. For example, FarmLogs is a business in the
agriculture industry but the product itself is information/service. Where do
you draw the line?

------
crocal
FWIW, this statistics mirrors well my own failure as a startuper. So even if I
cannot judge the dataset, it looks at least worthy of attention as a sobbering
checklist. Kudo to OP.

------
vellum
Information startups have the highest failure rate, but the capital
requirements are lower than, say, mining.

------
nuand
The "statistic" seems to make a point that taking a bet on a strategy and
losing is incompetence.

~~~
edgyswingset
The listed specific pitfalls aren't about taking a bet. They're pretty clearly
elements of incompetence. I wouldn't call nonpayment of taxes or living too
high for the business taking a bet on a strategy unless that strategy is to
fail.

