The fact is that more startups fail than succeed. The myth is that those who succeed have done something right while the rest failed due to mistakes in planning or leadership. I think that view is flat out wrong.
In the current system, the likelihood for success is strongly tied to the circumstances into which an entrepreneur is born. Startups often succeed because of the resources and network an entrepreneur already has. We know that communities with greater social capital see more startup success. In other words, opportunity is a product of social capital. A report by the United States Senate's Joint Economic Committee's Social Capital Project concludes that social capital produces opportunity and combats inequality. So, when startups fail, it is often because their founders lack social capital.
This means that if you are a founder without a lot of connections, resources, and know-how, you'll have to work harder. So, my suggestion is to focus on building meaningful relationships with the right people who can support you in building your business.
Other reasons startups fail:
- Lack of focus: Almost every entrepreneur I meet has multiple business ideas, but early stage entrepreneurs need to be crazy focused on their product/service and their customers.
- Lack of a growth mindset: A growth mindset is based on the belief that our abilities can grow and change with deliberate practice. So, being an entrepreneur is not a static identity or achievement. It's a skill, and you can get better at it with practice.
- Referencing the above point, lack of support from the right community: Having a large social network is helpful, but fewer, stronger ties to the right types of support can make all the difference.
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