Why Start-ups Fail: Dave Feinleib

Brad Feld pointed to a super astute and articulate post from VC Dave Feinleib on why startups go bloey. Cheat sheet summary is (and the whole thing is worth a read):

  • They spend too much on sales and marketing before they’re ready.
  • Spending
    on the sales and marketing operations means there is no return if
    customers don’t bite. When you spend money on the product that work can
    be leveraged in future versions. (In fact, the key to effective product
    delivery is to try a lot of things and see what sticks.)
  • The market outpaces the startup’s ability to execute. In
    the case of the startup in a hot sector that means how fast do you make
    critical decisions, hire key personnel, and manage limited resources.
    If, on average, you’re slower or less efficient than your competitors,
    you’re very likely burning more cash than they are as well.
  • There is no Entrepreneur.  But
    rare is the man or woman who can take an idea and transform it into a
    sharply defined product and then sell it to top-level prospective
    hires, investors and customers. An Entrepreneur as opposed to his
    lower-case counterpart is a product picker and a market visionary.
  • The market takes too long to develop.



(Via Brad)