Industry Research
90% Startup Failure Rate: No Market Need
CB Insights analysis of 101 startup post-mortems reveals the #1 failure cause
Source
CB Insights
Year
2023
Sample Size
101 post-mortems
Key Findings
- ✓ 90% of startups fail overall
- ✓ 42% fail because "no market need"—they built something nobody wanted
- ✓ First-time founders succeed 18% of the time (Stanford research)
- ✓ Average runway needed: 18-24 months minimum before break-even
Top Failure Reasons
- No market need (42%) — Built something nobody wanted
- Ran out of cash (29%) — Insufficient runway or poor financial planning
- Wrong team (23%) — Lack of necessary skills or team dynamics
- Outcompeted (19%) — Better competitors entered the market
- Pricing/cost issues (18%) — Couldn't find sustainable unit economics
Why This Matters
Most founders start with a "great idea" and build it before validating that anyone actually wants it. The #1 failure reason isn't execution, funding, or competition—it's building something nobody wants.
ReasonKit's BedRock tool forces you to ask: "Has anyone actually paid you money for this?" before you quit your job. It catches the blind spot that kills 42% of startups.