The reality is that over 90 percent of startups fail according to Forbes and Inc magazines. These startups fail for numerous reasons. The TOP 3 reasons according to a study by CBinsights include not the right market fit, ran out of cash, and not being able to bring together the right Team. At a conference we were at, a M & A lawyer told us we were wrong and that the failure rate for startups was 99%. This is an astounding figure as it means that only 1 out of every 100 startups succeed.
Maybe, the root cause to this is that Failure is glorified in Hollywood and Technology. This was popularized into the mainstream in the by the 1995 film Apollo 13. Gene Kranz in the movie used as a call to action says, "We've never lost an American in space; we're sure as hell not going to lose one on my watch. Failure is not an option." In technology, you often hear the phrase fail fast and fail often. This glorification of failure is an outright lie and a disservice to Entrepreneurs.
The inherent problem is that failure is celebrated as a badge of honor and a casualty of innovation. With regards to economics, it's a laissez-faire approach to capital allocation that favors the innovators and disruptors. But is it an effective and efficient approach for the overall economy? If 90-99% of GDP was wiped away from the global economy, would people pay attention to that statistic? It's an opportunity to disrupt and innovate the Entrepreneurial Ecosystem.
FREEAG8 is looking to disrupt and innovate this industry globally. This startup failure statistic is unacceptable and an opportunity to upend the status quo. We want to stop lying to Entrepreneurs about failure and help Entrepreneurs become more successful in their startups. Are you part of the problem OR will you be part of the solution? This is a question every Free Agent, Partner, and Venture Capitalist should ask themselves every day.
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