A VC's View on Why Startups Fail
June 12 2008 | 0 comment(s)
David Feinleib, who is a VC at Mohr Davidow Ventures, wrote a great article about why startups fail. David had some interesting points having been on both sides of the term sheet:
"They spend too much on sales and marketing before they're ready." It's always easier to ramp up rather than scale back. This is just human nature and is typically exaggerated when it comes to money. It's also easy to think that you need to rush to market before everyone else and that everyone else is as excited to hear about your company as you are to talk about it.
"The market outpaces the startup's ability to execute." This one came as a surprise, as we at the GSC typically see (and do) execute on things quickly. It's nice being a part of an agile company and I use that a means to remember why I left a bureaucracy, but apparently when your company is your lifeblood a lot of entrepreneurs get paralyzed and postpone important decisions.
"There is no Entrepreneur." This means that taking the business forward is different than coming up with the idea or developing the product. These are different skill sets entirely and it is rare for the innovator to have the right skills to get the best out of the company.
"The market takes too long to develop." Innovators are at the forefront...literally. And unfortunately the rest of us don't understand the brilliance we are shown. Sometimes the cash runs out before the entrepreneur is able to persuade to buy his idea.
Overall, David conludes:
"When it comes to startups, speed wins. But if you're still early, don't increase your burn and overspend on sales and marketing before you're ready. Sometimes you have to slow down to speed up."
Previous articles
August 2008 - 2 article(s) | show
July 2008 - 18 article(s) | show
June 2008 - 21 article(s) | show
May 2008 - 20 article(s) | show
April 2008 - 12 article(s) | show
March 2008 - 7 article(s) | show
February 2008 - 8 article(s) | show
January 2008 - 9 article(s) | show
December 2007 - 1 article(s) | show
November 2007 - 8 article(s) | show
October 2007 - 11 article(s) | show
September 2007 - 6 article(s) | show
Leave a Comment