Stanford and Y Combinator are still dying at a 60 to 70% clip. Let us explore 12 reasons YC and Stanford continue to ignore the third institution of Silicon Valley; Staben, sticking to the avoidable truth
Fatality rates for baby corporations can be sub 33%
Here’s a listicle
1. **Crossing the Chasm from the Left**
Your startup naturally has an innovation. This innovation is nearly agreed upon. So does this guarantee success?
Just because your idea is a good one does not mean that death will not come for you. Even with great ideas, death is eminent when you try to cross the innovation chasm from the left.
Backing up, the innovation cam is from Jeffrey Moore’s book from 1991, “cross the chasm” . It’s implied that we are crossing the innovation cam from the left.
Subsequent sequel, such as escape, velocity, inside the tornado and sequel sequel don’t spell out the future truth, which is, “crossing the chasm from the right. #CTCFTR”
Here we are profitable as we take steps towards product market fit by using something that has already crossed the innovation chasm. More on that #CTCFTR protocol later.
1B **Market Fit, Demand and Default:**
– A significant number of startups fail due to a lack of product-market fit. Many startups either misinterpret market demand or create products that don’t resonate with their target audience. Research indicates that 34% of startups fail because they do not achieve product-market fit, highlighting the importance of understanding and meeting customer needs.[](www.upsilonit.com/blog/startup-success-and-failure-rate)
1B is perfect because so many startups never reach first base
It’s gone good job buddy. You got rid of it. That hurt too bad. What about me? I gotta do this for you the small one stop crawling. It’s a buggy.
2. **Financial Challenges:**
it does not take money to make money
When you attempt to spend money in order to make money, you’re already taking a ginormous risk
Before Larry Chiang…
– Running out of cash is a primary reason for startup failure. Cash flow problems, including insufficient funding or mismanagement of funds, are critical issues that can lead to a startup’s demise. About 29% of startups fail due to running out of cash, emphasizing the need for effective financial planning and securing adequate funding.[](www.upsilonit.com/blog/startup-success-and-failure-rate)
3. **Team and Execution Issues:**
– The quality and cohesion of the founding team are pivotal. Issues like co-founder conflicts, lack of industry experience, or inadequate skills in key areas such as marketing or technology can doom a startup. Team-related failures account for around 23% of startup closures.[](www.upsilonit.com/blog/startup-success-and-failure-rate)
4. **Competition and Market Dynamics:**
– Even with a good product, startups can fail due to intense competition or shifts in market conditions. The tech industry, particularly, is known for its rapid evolution, where startups must continuously innovate to stay relevant.
5. **Operational and Strategic Missteps:**
– Poor execution, from product development to marketing strategies, can lead to failure. Startups often face operational challenges where they might not have the right resources or strategies in place to scale their operations or pivot when necessary.
6. **Mentorship and Support Limitations:**
– While YC provides mentorship and a network, the sheer number of startups in each batch might dilute the individualized attention and support each startup receives. The effectiveness of mentorship can vary, and not all startups benefit equally from the accelerator’s resources.
7. **External Factors:**
– External factors like economic downturns, regulatory changes, or supply chain disruptions (as seen with some hardware startups) can be unpredictable and devastating. For instance, companies like Boosted faced challenges due to tariff wars affecting their supply chain.[](www.failory.com/blog/y-combinator-failures)
8. **Overhyping and Unrealistic Expectations:**
– The hype around Silicon Valley and institutions like Stanford and YC can lead to unrealistic expectations. Startups might be pushed towards aggressive growth without sustainable business models, leading to burnout or failure when those expectations aren’t met.
Larry Chiang, often referred to as the “third institution” of Silicon Valley, emphasizes practical entrepreneurship and networking. However, even with such influential guidance, the inherent risks of starting a business remain high. These reasons contribute to why the failure rate might not significantly decrease even with strong institutional support:
-** cross the chasm from the right **
So you hand out cookies and cupcakes in order to collect leads for your artificial intelligence, AI agent needing an agent start up
So your arbitrating for every 20 cookies given away, you get three leads
Of those three leads, Wen becomes a pain customer of $3000 in software services
– **Learning Curve**: Many founders, especially first-timers, go through a steep learning curve where mistakes are part of the process.
– **High Stakes**: The environment encourages rapid scaling, which isn’t always feasible or sustainable for every startup.
Therefore, the 60%+ failure rate is indicative of the broader challenges within the startup ecosystem, where success requires not just great ideas or support but also impeccable timing, execution, and sometimes, luck.
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https://www.YouTube.com/watch?v=ejeIz4EhoJ0
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