Common Startup Failure Mistakes | Generated by AI
Question: What mistakes does Paul Graham mention as common reasons why startups fail?
Answer:
Paul Graham, founder of Y Combinator, has written extensively about why startups fail. In his famous 2013 essay “How to Start a Startup” and especially in the 2009 post “The 18 Mistakes That Kill Startups” (later expanded in other essays), he lists the most common fatal mistakes. Here is the classic list of 18 mistakes he identified, ranked roughly from most to least common/dangerous:
- Single founder – Having only one founder makes it harder to brainstorm, increases burnout risk, and scares off investors.
- Bad location – Being outside a startup hub (e.g., not in Silicon Valley/Bay Area at the time) limits talent, funding, and peer learning.
- Marginal niche – Choosing a niche that’s too small or not growing fast enough.
- Derivative idea – Copying an existing successful company instead of creating something new.
- Obstinacy – Refusing to pivot or change direction when evidence shows the original idea is wrong.
- Hiring bad programmers – Poor technical talent kills execution speed and quality.
- Choosing the wrong platform – Betting on a technology or platform that doesn’t take off.
- Slowness in launching – Taking too long to ship the first version (perfectionism).
- Launching too early – Launching with no users or traction and no plan to get them.
- Having no specific features in your first version – Building something with vague goals instead of solving one concrete problem extremely well.
- Raising too little money – Running out of runway before achieving product-market fit.
- Spending too much – Burning cash on offices, salaries, marketing instead of focusing on product and growth.
- Raising too much money – Taking big rounds too early, which brings pressure and distraction.
- Poor investor management – Ignoring or fighting with investors instead of treating them as allies.
- Sacrificing users to (supposed) profit – Optimizing for revenue too early instead of user growth and happiness.
- Not wanting to get your hands dirty – Founders who don’t talk to users, write code, or do support themselves.
- Fights between founders – Co-founder disputes that destroy the company (the #1 killer in YC’s early batches).
- A half-hearted effort – Treating the startup as a side project or being unwilling to work insanely hard.
Later essays (notably “Do Things That Don’t Scale” and “Startup = Growth”) condense the biggest killers to just a few core ones:
- Not building something users actually want (the #1 reason by far)
- Running out of money (usually because of the above + overspending)
- Founder discord / burnout
- Failing to ship and iterate fast enough
So while the full 18-mistake list is still widely quoted, Paul himself now emphasizes that almost all failures boil down to not making something enough people desperately want, combined with not iterating fast enough on user feedback.
References:
- The 18 Mistakes That Kill Startups – Paul Graham (2009)
- How to Start a Startup – Paul Graham (2005, updated)
- Startup = Growth – Paul Graham (2012)