Publication: Analysis of Startup Failure Patterns, Early Warning Signs, and the Startup Survival Matrix
Loading...
Type
Thesis
Degree
MBA
Date
2025
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Published Version
Abstract
Startups became a main player in transforming countries’ economies, fueling technological innovation, and creating vast job opportunities, yet unfortunately, the majority of startups fail at early stages of business life. Recent studies warn that about 90% of startups fail in the very first few years (Hvidkjaer, 2022), the failure has consequences not only on the economy at different scales but also on founders personal relationships, emotional distress and financial burden, and missed opportunities (Hvidkjaer, 2022; Eisenmann 2021). Even though many researchers analyze the reasons behind startups failure, with most studies focusing on isolated factors, the complex interaction between these factors is still not fully explored, explaining the consistently high rate of startup failure.
The topic of this thesis arises from a personal goal and a deep interest to understand the observations within entrepreneurial experience on both sides, success and failure. I have witnessed friends, relatives, and business owners invest years of their precious time and effort, into ventures that appeared promising at first, yet ended up unexplained, fading out years of savings and leaving founders at huge stress, anxiety, and financial losses, this motivated me to create a comprehensive, data-backed study that bridges the gap between academic theory and founders reality.
This study suggests that startups failure is rarely caused by a single reason, but instead, it heavily impacted by cascading interactions between different factors like vulnerable funding, market & timing challenges, team dynamics, wrong management strategies, and some other external factors. Inspired by specialized business and entrepreneurship books, focusing on and detailing startups failure patterns and how different risks can be mitigated, backed with a quantitative analysis of a rich dataset including details about thousands of successful and failure ventures across five major business sectors, and on the top, findings from a short tailored questionnaire, this research aims to develop a Startup Survival Matrix, a practical diagnostic tool for entrepreneurs and investors to understanding, identifying, and be alerted about cumulative risks that threaten the survival of their new ventures.
The Startup Survival Matrix provides founders, investors, and even policymakers with a comprehensive insights, early warning signs, and a winning strategy based on real businesses and entrepreneurship experience. By making the overlooked patterns of startup failure visible and actionable, this research aims to help more new startups survive and thrive, by expanding the knowledge and understanding of patterns driving startups to failure and by creating a roadmap for first-time entrepreneurs highlighting risks they might face in each stage during their journey.