Starting a business is exciting. But it’s also a gamble. The industry you enter plays a huge role in whether you’ll thrive or shut your doors early. In this article, we’ll look at what the numbers tell us about startup success and failure, and break it down by industry.
1. Overall startup failure rate is approximately 90%
Why 90% of startups don’t make it
It’s a tough number to swallow. For every ten people who chase their startup dream, only one crosses the finish line. Most don’t even get close. But what’s behind this high failure rate?
The main issue is a lack of real demand. Many founders build something no one actually needs. They’re excited about their idea, but the market doesn’t care. That disconnect alone kills more startups than anything else.
Then there’s cash flow. Founders often underestimate how much money they need to survive. Even if the product is good, running out of cash can end everything.
Poor teams also play a big role. If the people behind the business can’t work well together or lack the skills needed, cracks start to form fast.
What you can do about it
Start with validation. Before you write code or rent office space, make sure people really want what you’re offering. Talk to potential customers. Ask if they would pay for your solution. If you can, get them to commit money or time early. That’s the best sign you’re on to something.
Next, watch your money closely. Plan for more expenses than you think you’ll have. Make sure you have enough runway to last at least 12–18 months. Cut out what’s not essential and keep your costs lean.
Team-wise, don’t just partner with friends. Look for people who balance your weaknesses. If you’re technical, get someone who knows sales. If you’re a creative, bring on someone who understands operations. Shared vision matters more than shared interests.
Lastly, get feedback all the time. Don’t build in silence. Show your product early and often. Let your users shape what you create.
This 90% number is high—but not fixed. You can beat it. But you have to be strategic from day one.
2. 10% of startups fail within the first year
The danger of year one
The first year is brutal. It’s when you find out if your idea can survive real-world pressure. Ten percent of startups don’t make it past this point. That might not sound like a lot, but it’s the most critical year because this is when foundational mistakes are made.
Why do startups crash so fast? Often, it’s from moving too fast. Founders get excited and launch too early. The product isn’t ready. The messaging isn’t clear. Users don’t know what to do with it—and they leave.
Another reason is founder burnout. Year one is intense. You’re juggling product, marketing, sales, finances—all while learning on the fly. It’s easy to get overwhelmed.
How to survive your first year
Focus on fewer things. You don’t need ten features. Just solve one problem really well. Start with something small but painful. If you can remove a daily frustration from someone’s life, they’ll pay attention.
Keep your personal runway in check too. If you can’t pay your bills, you’ll panic. Try to give yourself at least a year where you’re not stressed about personal finances. That mental freedom can be the difference between quitting and pushing through.
Track everything, but act on only what matters. Don’t drown in data. Focus on learning what brings users back. What keeps them engaged? What makes them refer others?
Also, set very small goals. Tiny wins will build momentum. Instead of trying to get 1,000 users, aim for 10. Then 100. That momentum matters more than you think.
Most importantly, stay consistent. You don’t have to be flashy in year one. You just have to outlast the chaos.
3. 70% of startups fail within 10 years
The long game is harder than it looks
Even if you make it past year one, the journey isn’t over. Far from it. Over the course of a decade, seven out of ten startups shut down. The reasons shift over time. Early mistakes can be fixed, but long-term success needs constant adaptation.
The market changes. New competitors appear. Your early users might leave. What worked before may stop working. You need to evolve—or risk being left behind.
Winning over the long term
Longevity in startups is about systems. Not just hustle. Not just a great idea. You need to build habits that keep your business healthy.
Build customer relationships like you would personal ones. Reach out. Check in. Ask questions. That feedback keeps you grounded and relevant.
Create processes for things that repeat. If you onboard a client the same way every time, write it down. Make it better. Automate what you can.
Don’t forget your team. Turnover can kill momentum. Make your company a place where people want to stay. That doesn’t mean ping pong tables—it means respect, clarity, and growth.
Most importantly, know when to pivot. Some of the best companies today started as something else. If you notice declining engagement, rising churn, or a shift in what your customers ask for—it might be time to evolve your offering.
Think of your startup like a plant. It needs to be fed, pruned, and repotted as it grows. Don’t get stuck doing what worked five years ago.
4. SaaS startups have an average failure rate of 63% within 5 years
What makes SaaS so tricky?
On paper, SaaS (Software as a Service) seems like a dream. Recurring revenue. Scalable product. Low delivery cost. But 63% still fail within five years.
Why?
Building good software is hard. It takes time, money, and constant updates. And competition is brutal. There’s a tool for everything now. Unless your product is 10x better or hyper-focused on a niche, it’s hard to stand out.
Also, churn is a killer. If customers leave faster than you can replace them, you’re in trouble.
How to build a strong SaaS company
Solve a painful, specific problem. General tools get ignored. But if you help accountants file taxes faster, or help recruiters sort resumes in minutes, you’re speaking their language.
Don’t rush to build everything. Start with your core feature. Make it rock solid. If your users love it, they’ll stay—even if your UI isn’t fancy.
Customer support is your secret weapon. SaaS is a long-term relationship. People stay with tools that feel personal and helpful. Answer quickly. Be human. Listen.
Also, monitor churn like a hawk. If users drop off, ask why. Offer to talk. Find out what didn’t work. Then fix it.
Lastly, don’t ignore pricing. It’s not just about what feels “fair.” Pricing affects how your product is perceived. Test different models—per user, per feature, flat rate. Find what aligns with how customers see value.
5. Healthtech startups have a failure rate of around 56% by year five
Why healthtech is a tough nut to crack
Healthtech sounds noble—and it is. Helping people live better, healthier lives is a great mission. But nearly 56% of these startups still fail within five years.
Why? One reason is regulation. Unlike other industries, healthtech operates under strict laws. If your product isn’t compliant, it can’t go to market. That slows down development and adds cost.
Second, the sales cycle is long. Convincing hospitals or insurers to adopt new tech takes months—sometimes years.
Third, user trust is fragile. If your tool doesn’t work right—or worse, gives wrong info—users won’t come back. And they’ll tell others.
How to improve your odds in healthtech
Start by knowing the regulations. Whether it’s HIPAA in the U.S. or MDR in the EU, learn the rules early. Work with a legal advisor who understands healthcare.
Then, validate your idea with real users. Doctors, patients, nurses—whoever your product touches. Don’t assume what they need. Ask them.
Build with accuracy and trust in mind. That means clean UX, reliable results, and secure data. One mistake can damage your reputation.
Also, plan for a long sales cycle. Have a strategy for outreach, demos, follow-ups, and education. Build relationships with stakeholders early—even if they won’t buy right away.
If you can show how your product improves outcomes or saves money, you’ll have a better shot. But be ready to play the long game.
6. Fintech startups experience a failure rate of about 75% within 5 years
The fast rise and steep fall of fintech
Fintech is one of the most hyped sectors of the past decade. From mobile payments to investment platforms, these startups have promised to change the way we manage money. But with a 75% failure rate in five years, it’s clear that reality doesn’t always match the excitement.
So, what goes wrong?
Many fintech founders underestimate how complex financial systems are. They think a smooth app experience is enough. But in finance, security, trust, and compliance are everything. A small misstep can cost millions—or even shut you down.
There’s also fierce competition. Big banks are now tech-savvy. Other fintech startups are launching every week. It’s a race where most don’t reach the finish line.
Tips to thrive in fintech
If you’re building in fintech, make trust your core focus. Your users are trusting you with their money. That means airtight security, clear language, and real support when things go wrong.
Don’t ignore compliance. Work with experienced legal advisors from the start. Whether it’s KYC, AML, or PSD2, make sure your product follows the rules. Build this into your product and your pitch.
Design matters too. Your app should feel trustworthy. Use familiar patterns. Keep it simple. Let people know what’s happening at every step.
Find a niche. Instead of being a bank for everyone, be the best platform for freelancers, students, or first-time investors. Focus helps you stand out and scale faster.
Finally, partner with institutions rather than trying to replace them. Many successful fintechs work alongside banks and insurers, offering better user experiences on top of old systems.
7. E-commerce startups face a failure rate of 80% by year five
Selling online isn’t as easy as it looks
E-commerce has exploded. Anyone can start a store in a weekend. But the numbers are brutal—80% of e-commerce startups fail within five years. Why?
The barrier to entry is low. That means everyone is doing it. Standing out is hard. And customer expectations are sky-high thanks to Amazon and big brands. Fast shipping, easy returns, perfect service—it’s a tall order.
Margins are thin too. After ad costs, shipping, packaging, and fees, there’s not much left. If you’re not watching your numbers closely, you’ll burn through cash fast.
How to stay alive in e-commerce
The secret is differentiation. Don’t sell what everyone else is selling. Focus on a niche product, a unique brand, or a customer group that’s underserved.
Branding is everything. Your site, your tone, your story—it should feel like something people want to be part of. You’re not just selling a product. You’re selling an experience.
Retention matters more than acquisition. Instead of pouring money into ads, build email lists, loyalty programs, and post-purchase experiences that make customers come back.
Simplify your operations. Use tools that automate fulfillment, inventory, and customer support. The more you streamline, the more time you’ll have to focus on growth.
And lastly, measure everything. Know your customer acquisition cost. Track your profit margins. Monitor return rates. These numbers will tell you if you’re growing or just burning money.
8. Edtech startups have a failure rate of roughly 60% within 4–5 years
Teaching is noble—but hard to scale
Education is broken in many places. That’s why so many founders jump into edtech—to fix learning. But nearly 60% of these startups don’t make it past five years.
One big reason? Selling to schools is slow. Even if your product is great, getting into classrooms can take months—or years. Budgets are tight, and decision-makers are cautious.
Another challenge is engagement. Students and teachers won’t use tools that feel clunky or boring. Even the best idea fails if people don’t use it daily.
How to build a better edtech startup
Start with the user. Who will actually use your product? Teachers? Students? Parents? Understand their daily pain points. Don’t just build for what you think they need—build for what they’re asking for.
Make your product easy to adopt. Teachers don’t want to learn a complicated system. Students need instant feedback and a smooth experience. Keep it simple and intuitive.
Pilot programs can help. Work with a few schools or learning centers to test and improve your product. Use that feedback to shape your roadmap.
Also, consider going direct to consumers. Many successful edtech companies target parents or students instead of institutions. This can shorten your sales cycle and give you faster feedback.
Lastly, measure real learning outcomes. Show that your tool actually helps people learn better or faster. That data will help with marketing, funding, and growth.
9. Food and beverage startups fail at a rate of 60–70% in the first 5 years
Great taste isn’t enough
The food business is crowded and competitive. A good recipe or concept might get attention—but 60–70% of food and beverage startups still fail within five years.
Costs are a huge challenge. Ingredients, packaging, distribution, compliance—it all adds up fast. Margins are often low, especially for physical products.
Brand loyalty is also tricky. People may try something once, but getting repeat customers takes consistency and marketing.
How to make it in food and beverage
Start small and test often. Launch at farmers markets, pop-ups, or local stores. See what sells and what people say. Use this feedback to refine your product before scaling.
Focus on shelf life. If your product spoils quickly, you’ll have higher losses and tougher logistics. Find ways to extend freshness without compromising quality.
Distribution is key. Getting into stores sounds great—but comes with challenges. Think about how you’ll manage inventory, shipping, and store relationships.
Online sales can help. Direct-to-consumer lets you keep more profit and build relationships with buyers. A simple website and a strong Instagram presence can drive real sales.
And don’t ignore your brand story. Why did you create this product? What makes it different? People buy into stories. Share yours clearly and often.
10. Retail startups show a failure rate of 53% within 4 years
Traditional retail is being tested
Retail isn’t dead—but it’s changing. And with a 53% failure rate in four years, new players have to think differently.
Location used to be everything. Now, it’s just one piece of the puzzle. Online presence, delivery options, and social proof are just as important.
Costs are another hurdle. Rent, staff, inventory—it’s a big upfront investment. And if traffic is low, it can drain your resources fast.
How to survive in retail
Pick your niche wisely. Don’t just sell products—sell an experience. A retail store should feel like a destination, not just a transaction.
Use your space smartly. Consider hybrid models. A retail shop that also acts as a showroom, event space, or content studio gives you more value per square foot.
Leverage local marketing. Collaborate with nearby businesses. Host events. Create in-store experiences that can’t be replicated online.
Also, gather data. Track foot traffic, customer preferences, and conversion rates. Use this to improve layout, offerings, and pricing.
Lastly, blend online and offline. Offer click-and-collect. Sync your inventory across platforms. Let your customers shop how they want—where they want.
11. Transportation/logistics startups have a failure rate near 70% by year five
Big promises, bigger logistics
Transportation and logistics startups often aim to solve huge problems. Faster deliveries, better route optimization, smarter tracking—they all sound like winners. But despite the potential, around 70% of these startups collapse within five years.
Why? The biggest reason is complexity. These startups often rely on physical infrastructure. That means vehicles, warehouses, drivers, software, and sometimes even international shipping rules. Coordinating all of this is expensive and hard to scale.
Add to that thin margins and high customer expectations—especially in B2B environments—and the road to success becomes steep.
Tips to navigate the logistics space
Before you build, talk to businesses already in the field. Understand where current systems break down. Don’t just create new tech—create tools that work with existing systems.
Start local. Solve one problem in one market before expanding. Prove your concept in a limited geography where you can control more variables.
Automation is your friend. The more you can reduce manual processes—like dispatching, tracking, or route planning—the more scalable and profitable you’ll be.
Build partnerships early. Carriers, warehouses, fleet owners—they can be allies if you work together. Sharing resources or tapping into existing networks can save time and money.
Most importantly, don’t underestimate the power of timing. A startup that helps with same-day delivery may thrive in a metro area—but flop in rural zones. Match your offer to the environment.
12. Construction startups show a failure rate of 63% within 5 years
Building a business in a tough industry
Construction is one of the oldest and most regulated industries. That makes it hard for startups to break in. Around 63% of construction startups don’t make it past five years.
A major issue is resistance to change. Many companies still use pen-and-paper or outdated software. Convincing them to adopt new tools is a long and slow process.
Cash flow is another issue. Construction contracts can take months to close and even longer to pay out. That makes it tough for new players to survive the gaps.
How to lay a strong foundation in construction
Start by solving small, focused problems. Don’t try to rebuild the whole process. Instead, fix one piece—like estimates, worker scheduling, or compliance paperwork.
Use real-world validation. Spend time on construction sites. Talk to foremen and project managers. Watch how they work. Then ask: where’s the friction?
Make your product mobile-first. Construction teams are rarely at desks. Your tool must work in trucks, on scaffolding, and in tough weather. Simplicity matters.
Build trust through referrals. Construction is a close-knit industry. If one company likes your tool, others will follow—but only if the first experience is rock-solid.
Also, plan for slow sales cycles. Get creative with free trials, low-risk pilots, or deferred payments to help clients ease into adoption.
Success in this space isn’t about tech—it’s about blending innovation with rugged reliability.
13. Real estate startups fail about 50% of the time by year five
An industry ripe for disruption—but still risky
Real estate is full of outdated systems and slow processes. That’s why many startups try to fix it. But still, half of them fail within five years.
The challenge lies in complexity. You’re dealing with huge transactions, legal rules, and emotional buyers. Mistakes are costly, and users are cautious.
Another issue is fragmentation. There’s no one-size-fits-all platform. What works in one city may flop in another due to different laws or market dynamics.
How to succeed in real estate tech
Start by picking a specific vertical. Are you helping agents? Renters? Investors? Title companies? Focus your product around that one persona.
Understand the local rules. Real estate is highly regional. What’s legal in one state might be banned in another. Build your platform to handle those differences.
Offer real value, not just flashy design. If your tool saves agents an hour a day or helps sellers close faster, that’s real leverage.
Build relationships with brokers and agencies. They often control access to listings, buyers, and valuable feedback. Co-create with them if possible.
Lastly, think beyond the transaction. Real estate is a life event. There’s value in tools that support users before, during, and after a move—think budgeting, repairs, home management.
The winners in real estate tech don’t just digitize—they personalize.
14. Hospitality startups (hotels, travel) fail at 70% within 5 years
A people-first industry with complex tech needs
Hospitality is all about experience. But delivering consistently great service while managing costs and operations is hard. That’s why 70% of startups in this space fail within five years.
Customer expectations are high. Guests want fast booking, easy check-ins, personalized service, and instant help. One glitch can lead to a bad review—and lost business.
There’s also strong competition. Established players and global platforms dominate search and pricing, making it hard for newcomers to stand out.
How to offer better service through innovation
Focus on a clear pain point. Are you improving bookings, enhancing service, managing staff, or helping with reviews? Don’t try to do it all.
Design your product to be fast and fail-proof. In hospitality, downtime kills trust. Whether it’s a reservation system or a chatbot, it must work 24/7.
Empower the staff. Many tools overlook the people actually using them. Build with hotel workers or travel agents in mind. Make their lives easier.
Also, don’t forget integrations. Hotels use dozens of tools—PMS systems, CRMs, marketing tools. Your product should plug in smoothly.
Start small. Work with boutique hotels or local travel agencies before approaching chains. Use their feedback to polish your offering.
Hospitality tech is about more than tech—it’s about making guests feel cared for, even through a screen.
15. Media and entertainment startups face a failure rate around 55%
Creativity meets commercialization
The media and entertainment industry draws in dreamers, creators, and techies alike. But it’s also brutally competitive—and 55% of startups don’t survive the first five years.
Why? The main problem is monetization. Content is everywhere, and people expect it to be free. Building an audience is one thing. Turning that into steady revenue is another.
Virality is unpredictable. What works today might not tomorrow. Trends move fast, and attention is fleeting.
How to last in the attention economy
Start with a niche audience. Don’t try to be everything to everyone. Pick a subculture or interest group and create content just for them.
Think platform-first. Are your users on YouTube, Spotify, TikTok, or newsletters? Go where they already spend time and tailor your content for that format.
Focus on consistency. One viral hit won’t pay the bills. A steady stream of quality, relevant content builds trust and growth.
Monetization needs to be built in early. Ads, sponsorships, memberships, digital products—test different models and double down on what works.
Collaborate often. Partnerships with creators or influencers can help you grow faster and cross into new audiences.
Most importantly, build a brand, not just content. Your tone, style, and story should be clear in everything you do. That’s what makes people come back.
16. Energy/clean tech startups have a failure rate of around 50–60%
A future-focused industry with high upfront costs
Clean tech is growing fast. Solar, wind, EVs, battery storage—these are the technologies shaping our future. But the road is far from smooth. Around 50–60% of energy startups fail within the first five years.
Why? One major reason is cost. These startups often need significant capital just to get off the ground. Hardware, research, manufacturing—it adds up fast.
Then there’s regulation. Each country—and sometimes each state—has different energy rules and approval processes. Navigating that can slow down progress and drain resources.
Sales cycles are long, too. Energy projects, especially in B2B or infrastructure, can take years to land. That means long gaps without revenue.
How to power through in energy and clean tech
Start by narrowing your focus. Are you improving generation, storage, or efficiency? Pick one and become the best at it. Investors and customers like clarity.
Partner with larger players. Energy is dominated by giants. If you can help them save money or meet sustainability goals, you have a shot at collaboration, investment, or acquisition.
Government funding is a real lifeline. Grants, tax credits, and pilot programs exist in many countries to support clean energy. Learn how to apply and take advantage.
Be transparent with impact. Metrics like CO2 saved, kWh generated, or water conserved speak louder than marketing copy. Let your numbers do the talking.
Finally, prepare for the long haul. Have a financial runway that accounts for delayed deals and approvals. Energy is a long game, but a rewarding one if you get it right.
17. Biotech startups show a failure rate of 55%–60% by year 5
High risk, high science, high stakes
Biotech startups are on the cutting edge of science. New drugs, diagnostics, therapies—they offer real impact. But with a 55–60% failure rate by year five, success requires more than good research.
The biggest hurdle is the time it takes. Clinical trials, lab testing, approvals—they can stretch over years. It’s hard to stay alive that long without strong funding and patience.
There’s also complexity. Founders need to balance scientific progress with business needs, while communicating clearly to non-scientific stakeholders.
Strategies to survive in biotech
Start by aligning your science with a market need. Just because something is scientifically possible doesn’t mean it’s commercially viable. Know your target user or patient profile and build for them.
Work closely with research institutions and universities. They can offer access to labs, talent, and credibility. Some may even help with funding or trials.
Get regulatory help early. FDA or EMA approvals aren’t something you figure out later. Build your compliance roadmap as early as possible.
Don’t wait too long to bring in business minds. Scientists may invent the product—but scaling it requires operators, marketers, and salespeople who understand the industry.
Finally, communicate clearly. Investors may not understand protein sequencing or molecular pathways. Learn to explain your work in simple, compelling terms. It makes fundraising—and storytelling—far more effective.
18. Hardware startups fail at a rate of 75%–80% within 4 years
Building physical products is a whole different game
Hardware may seem exciting. Smart devices, wearables, robotics—it feels tangible and cutting edge. But a staggering 75–80% of hardware startups shut down within four years.
Why? Because hardware is hard. You’re not just writing code. You’re managing supply chains, factories, shipping, warranties, and support. One mistake in production can delay launches by months—or kill the company.
Then there’s the cost. Tooling, prototyping, materials—all require serious capital long before you ever make a sale.
How to build a hardware startup that actually lasts
Don’t build before you validate. Use renders, mockups, or even 3D-printed prototypes to gauge interest. Crowdfunding platforms can help test the market before you commit.
Start small. One core function done well is better than a gadget that tries to do too much. Focus keeps your product easier to build, test, and support.
Plan for manufacturing early. Don’t assume it’ll work just because your prototype did. Factory production is a different beast. Work with manufacturers during the design process—not after.
Offer amazing post-sale support. Hardware can fail. When it does, how you handle returns, repairs, and replacements can make or break your reputation.
Most importantly, think about version 2 from day one. Hardware products need to evolve just like software. Make sure your business model supports future upgrades, parts, or services that keep customers around.
19. Mobile app startups have a failure rate of 80–90% within 3 years
The graveyard of the app store
Mobile apps are everywhere. But almost none survive. With a failure rate of 80–90% within just three years, the odds are steep.
There are millions of apps. Most users download an app, use it once, and forget it. If you don’t hook them quickly, they’re gone.
On top of that, user acquisition costs have skyrocketed. Ads are expensive. Organic reach is limited. And app store optimization only gets you so far.
How to win in the app world
Solve a real daily problem. Not something interesting. Something urgent. Something people check every day. That’s what creates habit.
Design is critical. If users get confused or frustrated within seconds, they’ll leave. Your app must be intuitive from the very first tap.
Build in retention hooks. Push notifications, reminders, content updates—these help keep users engaged. But don’t overdo it. Annoying users kills trust.
Don’t try to monetize too soon. Get people hooked first. Then offer paid features that clearly add value. Freemium models work well if done right.
Also, test marketing channels constantly. What works one month may flop the next. Use small budgets to test paid ads, influencer shoutouts, or PR pushes.
Finally, measure and iterate. App analytics are rich with insights—use them. Double down on what works. Cut what doesn’t.
20. Marketplace startups (like Uber/Airbnb models) face a failure rate of 60–70%
Balancing two sides is twice the challenge
Marketplace startups connect two groups: buyers and sellers, drivers and riders, hosts and guests. But getting both sides onboard is tough. That’s why 60–70% of these startups fail.
The main challenge is the chicken-and-egg problem. Sellers don’t want to join until there are buyers. Buyers don’t come without enough sellers. Balancing that growth is a delicate act.
Trust is another barrier. If one bad experience goes viral, it can tank your whole brand.
Building a two-sided platform the smart way
Start with one side. In many cases, supply comes first. Get service providers, drivers, freelancers, or hosts ready before you open the doors to demand.
Create value before the transaction. Offer tools, insights, or networking that make sellers want to stay—even before they make a sale.
Subsidize early growth if needed. This might mean paying drivers even if they don’t have riders, or offering cash bonuses to first users. Use it wisely and only during launch phases.
Keep quality high. Don’t let just anyone in. Build rating systems, vet users, and provide training or support to raise the overall experience.
Build local density. Start in one neighborhood, city, or industry. Make the experience amazing there before you scale wider. A weak network in ten cities is worse than a strong one in one.
Marketplaces are powerful—but only if you can get both sides to show up and stick around.
21. Gaming startups have a failure rate near 85% within 2–3 years
Fun doesn’t always mean fortune
Gaming is one of the most exciting industries to enter. There’s passion, creativity, and a massive global audience. But there’s also a brutal truth: about 85% of gaming startups fail within just two to three years.
Why do so many crash so fast?
Games are expensive to build, and even harder to monetize. Most players expect free content. You’ll need to find a way to make money through in-app purchases, ads, or subscriptions without turning users off.
Competition is fierce. Thousands of new games are released each year, and getting noticed in crowded app stores or on platforms like Steam is an uphill battle.
Tips for lasting longer in the gaming world
Start with a unique hook. What makes your game stand out? Is it the story, mechanics, style, or humor? Find your edge and build around it.
Develop a community early. Gamers love to share feedback, stream content, and build fandoms. Invite them into the process before your game is done. Early access, beta tests, and Discord groups help you grow support before launch.
Keep scope small. The biggest trap in gaming is trying to build a massive, open-world epic with a small team. Finish a small, tight game and iterate from there.
Plan monetization early. Whether you offer premium upgrades, cosmetic items, or season passes, know how you’ll make money before launch. Just don’t force it—players hate feeling tricked.
Get involved in partnerships. Platforms like Epic, Unity, or even streamers can give your game a huge push. Apply for funding, accelerator programs, or co-marketing opportunities.
And remember: games succeed when they’re fun, repeatable, and worth talking about.
22. AI and ML startups show a failure rate of 50–60% by year five
Smarts alone won’t save you
Artificial intelligence and machine learning are buzzwords in tech. Everyone wants to build the next AI-powered platform. But still, 50–60% of these startups fold by year five.
The problem isn’t that the tech doesn’t work—it’s that it’s often built without a clear use case. Many AI startups lead with “cool” instead of “useful.”
Another challenge is data. Training models requires large, high-quality datasets. Without access to that, your algorithm is just theory.
How to make your AI startup work
Start with the problem. Don’t start with the tech. Who needs help making faster decisions, predicting outcomes, or saving time? Build for that.
Narrow your focus. General AI products often flop. But if your tool helps logistics companies predict delivery delays—or retailers forecast stock—it becomes valuable fast.
Find quality data partners. If you don’t have enough data, partner with someone who does. In some cases, you may need to generate your own by offering free tools or pilots.
Explain your results. Decision-makers don’t care about your model’s architecture—they care about outcomes. Show clear ROI, time savings, or error reductions in plain language.
Finally, don’t forget the ethics. How your AI handles bias, transparency, and privacy will come under scrutiny. Build safeguards and communicate them clearly.
AI is only powerful when it solves real problems in real businesses.
23. Blockchain/crypto startups fail at a rate of around 90%
Hype is high, survival is not
Blockchain and crypto have had explosive highs and painful lows. Startups in this space often promise to revolutionize finance, governance, or ownership—but 90% of them don’t make it.
Why?
Many of these startups launch with unclear value. They create tokens or platforms before proving real-world utility. Others are hurt by market volatility—when crypto prices fall, investor interest often follows.
Regulation is also a wild card. Different regions have wildly different rules, and new ones are being written all the time. One legal shift can wipe out a product overnight.
How to build something that lasts in blockchain
Focus on use, not hype. What real-world pain does your blockchain solution solve? Whether it’s supply chain tracking or identity verification, clarity wins.
Build for compliance. Work with legal teams that understand crypto law. Design your product to be regulation-ready from day one.
Avoid token-first models. Instead, create a product people want. Tokens should support that experience—not replace it.
Build transparency into your operations. Crypto users are skeptical. Open-source your code, publish audits, and explain how your systems work.
Lastly, don’t chase price. Build value. That’s what keeps users and investors with you through bear markets.
If your product wouldn’t work without blockchain—it might not work at all. Let the tech serve the problem.
24. Legaltech startups have a failure rate around 55% in 5 years
Law is slow to change
Legaltech startups often aim to modernize a very traditional space. Automating contracts, simplifying case management, or offering DIY legal tools can all save time and money. Still, about 55% of legaltech startups fail within five years.
The biggest challenge? Adoption. Lawyers are risk-averse. They trust what they know. Convincing them to try something new is tough—especially if it touches sensitive client data.
Sales cycles are also long. Getting a law firm to sign on might take months of demos, approvals, and security reviews.
How to break into legaltech successfully
Start with a specific legal workflow. Are you helping with discovery? Billing? NDA automation? The narrower the focus, the easier it is to prove value.
Make your product bulletproof. It must be fast, secure, and reliable. One mistake could lose a case—or a license.
Build for compliance. Legal teams are obsessed with confidentiality and ethics. You must meet those standards and be able to prove it.
Offer free pilots or freemium models. Let law firms test your tool without risk. Once they’re in, they’re more likely to stay.
Don’t try to replace lawyers. Empower them instead. Tools that save time or reduce grunt work are more likely to win favor than tools that try to “automate away” the profession.
Lastly, build trust with content. White papers, legal blogs, and webinars build your authority. Lawyers respect knowledge. Share yours.
25. Agritech startups face a failure rate of about 50–60%
Innovation meets the land
Agriculture is one of the world’s most essential industries. It’s also one of the oldest. That makes it tough for new players. Around 50–60% of agritech startups don’t make it past five years.
The main reason? Adoption. Many farmers are skeptical of new tech—especially if it’s expensive or complicated. They need to see proof it works before they invest.
Also, conditions vary wildly. What works on one farm may not work on another due to soil, climate, crops, or tools.
How to grow your chances in agritech
Focus on one crop, one region, one outcome. Do you help corn farmers in the Midwest detect pests early? That’s a clear, focused goal.
Make your product easy to use. Farmers are busy. If your app or device requires constant updates, signal, or training, it won’t last.
Partner with agricultural schools or co-ops. They have deep relationships and can help spread your tool faster.
Measure impact clearly. If your tech saves water, boosts yields, or reduces disease—show it. Let farmers test it on a small section of land first.
Consider financing options. Equipment is expensive. If you can offer payment plans or financing through local banks, adoption will rise.
Agritech is about patience and proof. If you get those right, your roots will hold strong.
26. Martech startups fail around 55% within 4 years
Selling to marketers isn’t always easy
Marketing technology, or martech, is a crowded field. Tools for email automation, content planning, SEO, CRM—there’s a platform for everything. But despite the demand, around 55% of martech startups fail within four years.
The main issue? Saturation. Marketers are overwhelmed with choices. If your product doesn’t stand out, it won’t get picked. And even if it does, switching costs can be high—so users may stay with tools they don’t even like.
Churn is another major problem. If results don’t show quickly, users cancel fast.
How to win in martech
Start by solving one urgent problem. Not “help you grow.” That’s vague. Instead, think “automatically retarget people who abandon checkout.” Specific wins convert better.
Make onboarding instant. Marketers don’t want to read manuals. Your platform should guide them, help them launch fast, and show early results.
Integrate with existing tools. Marketers use dozens of platforms. If your product doesn’t work with Google Analytics, Slack, or Shopify, you’ll lose ground quickly.
Provide amazing support. Marketers often work late, fast, and under pressure. Responsive, knowledgeable support builds loyalty fast.
Finally, show ROI clearly. Help users prove your tool is working to their boss. If they can justify your cost with clear gains, you’ll stay in the budget.
Martech isn’t about buzzwords. It’s about doing something better, faster, or easier than before—and showing that value fast.
27. Insurtech startups have a failure rate of 60–65%
Disrupting insurance is a big ask
Insurtech startups aim to simplify, personalize, or digitize the insurance experience. But despite the buzz, 60–65% of them shut down within five years.
Why?
Insurance is built on trust, risk analysis, and strict regulations. It’s slow to adopt change, and any new player must prove that they can handle sensitive data, complicated pricing, and customer complaints—without error.
It’s also hard to acquire customers affordably. Insurance users don’t switch providers easily, and it often takes time to build enough brand equity to be trusted.
How to improve your odds in insurtech
Start with a segment. Focus on renters, freelancers, pet owners—any group with unique insurance needs that aren’t well served.
Make your interface simple. Most people find insurance confusing. Your product should simplify every step, from quote to claim.
Partner with traditional insurers when you can. They have data, customers, and compliance teams. You have agility and tech. Together, you may scale faster.
Highlight speed and clarity. Fast quotes, clear policies, and easy claims help you stand out.
Build long-term trust. You may not get users right away. Create helpful content, offer free tools, and stay in the conversation until they’re ready to switch.
Insurtech is less about disrupting and more about improving—with empathy, security, and service.
28. Subscription box startups fail at a rate of 70% within 3 years
The box model isn’t always sustainable
Subscription boxes were hot for a while—beauty samples, snacks, books, and beyond. But now, about 70% of these startups fail within three years.
The issue is retention. People sign up out of curiosity, then cancel when the novelty wears off. If every box feels the same, churn rises fast.
Costs are another problem. Fulfillment, packaging, shipping, and product sourcing cut into profits. Add marketing costs and things can get tight quickly.
How to stay in the game
Nail your niche. A box for “book lovers” is broad. But one for “mystery book fans who love tea” is specific—and memorable.
Focus on surprise and delight. If your box is expected, it gets boring. But if it includes exclusive items, clever themes, or interactive elements, people stick around.
Watch your unit economics. Know how much it costs to acquire and serve each customer. If you’re losing money each month, you won’t last long.
Offer clear incentives for long-term plans. Discounts, free gifts, or loyalty perks help keep subscribers from leaving.
Finally, build community. Let customers share unboxings, give feedback, and vote on future themes. That interaction turns subscribers into advocates.
Subscription boxes can work—but only when the experience is worth looking forward to.
29. Fashion startups face a failure rate near 70% by year five
Style fades, but failure rates are steady
Fashion is creative, fast-moving, and full of dreamers. But it’s also unforgiving. Around 70% of fashion startups fold within five years.
The biggest issue is standing out. Thousands of new brands launch every year. Without a strong identity, it’s easy to get lost.
Inventory is also tricky. Order too much, and you’re stuck with unsold stock. Too little, and you miss sales. Balancing supply and demand is tough when trends shift fast.
How to sew up a better outcome
Start with your brand. Why do you exist? What message do you send? If customers can’t connect emotionally, they won’t come back.
Use pre-orders or drops. Instead of guessing demand, sell limited releases first. That builds urgency and reduces waste.
Work with micro-influencers. Big names charge big fees. But small creators often have more loyal followers—and more trust.
Sell direct. DTC gives you better margins, more data, and a closer relationship with your customers. Build your site and own your audience.
Watch your margins. Fashion can look glamorous but cost heavy. Track every cost and optimize your supply chain from day one.
And always listen to your audience. Trends don’t just come from runways—they come from real people. Stay close to them.
30. Cybersecurity startups have a failure rate of 50–55%
Fighting digital threats with fragile business models
Cybersecurity is more important than ever. As threats grow, so does the demand for protection. Yet, 50–55% of cybersecurity startups don’t survive past five years.
The challenge? You’re selling fear—but also trust. Buyers want strong protection, but they also want assurance your solution won’t create new problems.
It’s also hard to prove ROI. A customer might never know if your product “worked”—because no breach happened. That makes marketing and sales more complex.
How to build a secure business
Start with a clear use case. Don’t say “we protect data.” Say “we detect ransomware in under 3 seconds.” Specificity builds confidence.
Target one audience. Large enterprises, SMBs, and individuals all have different needs. Don’t try to serve them all.
Make integration simple. Many customers already use 10+ security tools. If your solution doesn’t play well with others, it won’t be adopted.
Offer transparency. Explain what your product does, how it works, and how you handle data. Trust is earned through clarity.
Lastly, be responsive. In cybersecurity, support is part of the product. Be ready to help, patch, and communicate quickly in case of issues.
In this field, trust is your strongest armor—and your hardest asset to win.
Conclusion
The startup world is thrilling, but it’s not easy. Across all these industries, one theme remains the same: clarity, focus, and user obsession win. Success isn’t just about having a great idea—it’s about solving a real problem, consistently delivering value, and staying flexible enough to adapt.
