Startup Tips #5 – Why Startups Fail

A case study of OUYA and the entrepreneurs’ trap

The truth is that most startups fail. But this statistic would be much lower if founders simply embarked on the simple, but not easy, process of Customer Development. Unfortunately, most entrepreneurs neglect to do this before launching their business — mostly because it’s hard and not nearly as fun as building your product or service. But also because most people really don’t even know how to do it.

Why Startups Fail

But how do you extract the real need from potential customers so you

We’ve all heard stories of startups who had rocket-powered growth and an equally fast crash and burn. Companies like Ouya, YikYak, and Jawbone raised tons of money, launched a product, invested millions in sales and marketing only to come crashing down soon after they ran out of money.

In simple terms, they never did the work required to achieve product-market fit.

This customer development tip looks at one of these companies, OUYA, and figure out why they failed.

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