Total Startup Failure: A Nightmare You Won’t Wake Up From

QArea Team by QArea Team on October 31, 2016

Total Startup Failure: A Nightmare You Won’t Wake Up From
Reading Time: 2 minutes

It’s always fun to spook ourselves with maniacal demons and hideous monsters on Halloween. But those guys are fun child’s games, if compared to reality. If you are really willing to go for a decent fright night – check out the following post.

Happy Halloween and don’t say that no one warned you! Ah-ha-ha-ha!

The most blood-curdling things in our life have nothing to do with monsters, ghosts, or wicked clowns (though one should admit they are really creepy).

The scariest things which often haunt our night dreams are shame, feeling of loss, and loneliness.

They are simple and harrowing.

And the most terrible nightmare which makes your heart pounding like crazy, feeling cold and sweating like hell is the one which you cannot wake up from.

A total failure.

But how probable is that you wake up one morning and see that your worst nightmare came true?

According to the statistics, the percent that you will is quite big.

Failure rates

Let’s have a look at percentage of startups that already died during the 5-year period from 2000-2005:

  • 1st year – about 21% of startups that opened in 2000 failed within the first year of doing business.
  • 2nd Year – percent of failures amounted to 34%.
  • 3rd Year – 42% failed.
  • 4th Year – about 53% of startups were able to make it.
  • 5th Year -only 48% of the businesses survived.

Top startup death rate by industries

Choosing the industry for your startup does make a difference and may increase or reduce odds of your succeeding or losing.

  • Construction – the odds of failing here are the biggest. 64 % of construction businesses don’t survive through their 5 years of life.
  • Technology, communication – such startups are in fashion, however 61 % of them die after five years.
  • Finance, Insurance, and Real Estate – about 60 % don’t survive their 5th year.
  • Transportation – It is not very favorable for startups sphere 51.4 % don’t make it after 5 years.
  • Retail businesses – 59 % of failures after 5 years.

The greatest startup failures

1. Color was planned to be another super popular social network. Big investors believed into its great future, and the startup managed to collect 41 million $. However, the app didn’t live up to the expectations, and missed the mark. The reasons were: not user-friendly UI, lack of privacy, and little understanding by the users how Color should be used correctly. In fact, all photos taken with Color were public, and anyone in the proximity of the original image poster could see them.

2. was a British dot com company, set up in the late 90-ies. It was selling branded fashion apparel in the Internet. A couple of delays before launching the product, problems with UI, and the fact that the company burnt 135 million $ during a year and a half led to the catastrophe and complete failure.

3. Pay by Touch was the app which allowed users to pay for their products and services by swipe of a finger. The sum of money invested into it was really huge. It amounted to 340 million $. The app met the disaster because of the startup’s CEO John P.Rogers who was accused of domestic violence, drug possession, and squandering corporate money.

To prevent horrific startup disasters, read on 5 harrowing mistakes and how to avoid them!