“Why Startups Fail: A New Roadmap for Entrepreneurial Success” is a book by Tom Eisenmann, a professor of entrepreneurship at Harvard Business School, who has also written over a hundred classic Harvard Business School cases. The book is based on his multiyear research project and a detailed survey of almost 500 founder/CEOs, aiming to chart the distinct challenges faced in launching, scaling, and dealing with startup failure.
- Eisenmann identifies six distinct patterns of startup failures: Bad Bedfellows, False Starts, False Promises, Speed Traps, Help Wanted, and Cascading Miracles. Understanding these patterns is key to avoiding common pitfalls2.
- Despite the perceived glamour of starting a new business, Eisenmann suggests that more graduates should consider improving established businesses rather than starting new ones, as the majority of startups are likely to fail1.
- The book provides valuable case studies and insights, but it does not offer many specific conclusions, leaving a significant amount of interpretation and decision-making up to the reader1.
- A solid framework for regularly evaluating a startup’s health and conducting a postmortem in the event of failure is proposed, offering practical guidance
Eisenmann’s work includes examining the factors behind startup failures and seeking to reduce “avoidable errors” that can lead to a startup’s demise. He believes that society needs entrepreneurs to solve numerous problems and that it’s essential to prevent talent and resources from being tied up in ventures that are doomed to fail.
Pros and Cons
- Insightful: The book provides helpful insights and detailed analysis of why startups fail, based on Eisenmann’s personal experience and the survey results of almost 500 founders/CEOs. One reader mentioned, “The ideas, concepts, and solutions that are laid out in the book are well thought out”
- Clear and Engaging Writing Style: The writing style is content-rich, engaging, and well-paced. A reader commented on the book’s clarity, stating it was “written with such clarity that it was easy for a non-business-type person like me to understand”.
- Valuable Case Studies: Eisenmann offers fascinating stories of ventures that failed to fulfil their early promise, offering frameworks for detecting when a venture is vulnerable to failure patterns, along with a wealth of strategies and tactics for avoiding them. One reader appreciated the well-structured narrative provided by these case studies.
- Practical Framework: The book presents a solid framework to regularly evaluate your startup’s health, enabling you to identify where you need to course-correct before it’s too late. A Goodreads user pointed out that “by using a solid framework to evaluate your startup’s health regularly, you’ll be able to identify where you need to course-correct before it’s too late”.
- Lack of Specific Conclusions: Some readers may find the book exhausting due to its “both sides” approach of considering all pros and cons of each topic. A Business Insider review critiqued that “few specific conclusions are drawn” which might leave readers craving more concrete guidance.
- Not Enough Focus on Startup Avoidance: Eisenmann doesn’t consider the possibility that fewer people should pursue startups in the first place, suggesting that society might benefit more if talent were directed towards improving established businesses. This perspective was noted as a potential shortcoming by a Business Insider reviewer.
- Possibly Overwhelming Information: The sheer breadth of variables identified and the depth of uncertainties involved in startup success might leave readers with a strong impression that startup success is highly unpredictable, despite the useful checklists and stories provided. As put by a Business Insider reviewer, “the depth of uncertainties involved leaves a strong impression that nothing is likely to change the overwhelming proclivity of startups to fail fundamentally”.