Why Startups Fail: A New Roadmap for Entrepreneurial Success

In addition to "Start-up Owner’s Manual" (Blank and Dorf), this is a must-have for anyone in the start-ip world at any stage of its life. A founder/executive team is going to benefit the most from this book primarily from its well-laid out checklist of what not to do. While a plethora of books explain how to build a great company, it is often overly optimistic or confuses good outcomes with good processes. Eisenmann provides a roadmap to develop a good strategy framework and risk management processes for a start-up.Through examples of some failed companies, the author teases out six key themes that the author asserts will explain most failures. These themes are grouped into two stages of a start-ups life – Launching (teaming, market fit, misleading early success) and Scaling. The latter deals with issues related to scaling for scope or speed. For each factor, the book discusses various aspects - founder psychology, investor mindsets, teaming, management processes, etc.The bulk of the discussion is centered on a 'Diamond-and-Square" framework that tries to formulate the key stakeholders and contextualizing various business functions (tech, operations, marketing along with the value proposition and profit formula). A "Double-Diamond Design Model" provides a convergence-divergence strategy for problem definition and solution development phases. Each chapter discusses various parameters that will help a startup leader develop a clear strategic and operational plan. In the section on "scaling", the author discusses a "Six S" framework to define issues of staff, structure and values during various types of scaling. Eisenmann also warns on situations where concepts from popular techniques such as lean start-ups are either misinterpreted or applied incorrectly. While the bulk of examples tend to focus on a direct-to-consumer business, the lessons and the tools are not tied to it. In fact, one of the most useful chapters in the book is the detailed discussion on the role (if any) of strategic customers (that chapter alone was well worth for me; also note that It is difficult to provide a concise summary for this book - you are better off buying both a hard copy and an electronic copy to make your highlighting not distract for a second reading).Failure, of course, is always going to be part of entrepreneurship, this book doesn't claim it can avoid them - but a careful (and humble) reading of the various thought exercises, examples, frameworks provided by the author will decrease chances of a failure. A must-read.

You learn more from what goes wrong than what goes right. And, personally, I would much prefer to read about it than participate in it. Having started and run multiple companies over the years, some of which have had the benefit (??) of "Adventure Capital", this book is a wonderfully clear, concise summary of the way you can drift off the tracks - often without even realizing it at the time. I bought this to both remind and re-educate myself in relation to some of my own disasters, and to try and stay on the straight and narrow for the next round. Startup or investor - I can commend this to you both.

A detailed account that highlights the importance of failure and how to fail well. Eisenmann’s experience as a Harvard Business School Professor really comes through with his detailed explanations and the use of case studies that make this an immersive and educational read.I’d you’re an entrepreneur, aspiring to become one, or know one you should get this book.

Curious, I did some preliminary research before reading this book. These data caught my eye:o 51 percent of owners of small businesses are 50-88 years old, 33 percent are 35-49 and only 16 percent are 35 years old and under.o 69 percent of U.S. entrepreneurs start their businesses at home.o According to the National Association of Small Business’s 2015 Economic Report, the majority of small businesses surveyed are S-corporations (42 percent), followed by LLCs (23 percent).o While around 9 percent of all American businesses close each year, only 8 percent are opened.o 51 percent of people asked, “What’s the best way to learn more about entrepreneurship?” responded with “Start a company.”o A bit more than 50 percent of small businesses fail in the first four years.o In fact, of all small businesses started in 2011:- 4 percent made it to the second year- 3 percent made it to the third year- 9 percent made it to the fourth year- 3 percent made it to the fifth yearo Leading causes of small business failure:- Incompetence: 46 percent;- Unbalanced experience or lack of managerial experience: 30 percent;- Catchall category (includes neglect, fraud, and disaster): 13 percent; and- Lack of experiences in line of goods or services: 11 percent.* * *These data are comparable with the extensive research that Tom Eisenmann consulted but the insights he provides in Why Startups Fail are essentially based on what he learned from his own "firsthand" studies that included rigorous and intensive interviews of startup founders and investors, his MBA classroom at Harvard Business School ("my most productive source of insight"), and a survey of the founders of 470 new ventures who responded to "a broad range of questions about their products, customers, competition, teams, funding and so forth."One of Eisenmann's most interesting examinations is of what he characterizes as a Catch 22: "A founder cannot pursue a novel opportunity in any meaningful way without resources, and she can't attract the resources until she's actually pursued the opportunity -- at least to the point where she can demonstrate to resource owners that the risks are reasonable." He suggests one or more of fourf\ tactics to reduce resource requirements while respectively resolving, shifting, deferring, or downplaying opportunity related risks."Keep in mind that his role as he sees it is to provide in a single volume everything he has learned about the most important dos and dont's of startup entrepreneurship from a wide and deep range of real-world experiences with both success and failure.Be sure to check out Eisenmann's superb Introduction (Pages 3-16) and Appendix (Pages 294-314) which provide an explanation of scope and nature of coverage, and, various research resources that enrich his lively as well as eloquent and informative narrative.Who will derive the greatest benefit from the material that he provides? Four groups immediately come to mind: those now thinking about launching a startup; others who have recently done so; still others whose startup is in danger of failure; and finally, those financial sources (individuals as well as institutions and agencies) that have invested in startups.