The New Economy: Why Your Start-Up Will Fail

LONDON, UNITED KINGDOM — (Marketwired) — 06/13/16 — The standard line of encouragement is that, with hard work and perseverance, your company will thrive. However, a special report in The New Economy suggests that most tech start-ups will likely collapse within a few short years.

Last year saw a number of high-profile names do just that, and The New Economy report expands on how longevity has proven an elusive quality for even the most impressive names in tech. Quirky, a platform for people to pitch their ideas for new gadgets, was last year sold to a holding company, while Homejoy, an app set up in 2012 for on-demand house cleaners, never turned a profit, and Secret, a social network where people could post anonymously, quietly shut down.

The list of failures goes on, and a closer look at the situation shows that most start-ups quietly fade into obscurity.

The New Economy report cites Statistic Brain Research Institute research to show that only 37 percent of start-ups are still operating after four years. By year 10, 71 percent of all start-ups, regardless of the industry, will fail. For young start-ups, there is no shortage of potential business-killing hurdles.

For start-ups to survive in the long term, most need to cool their expectations and get a handle on what remains a hyper competitive and routinely cutthroat market. “Careful decisions, steady but restrained growth, and a refusal to emulate the unrealistic expectations of unicorns are what is needed if a company is to last longer than your average hoverboard.”

To read the report in full, alongside others on the fall of Yahoo, the history of cryptography, technology in agriculture and internal prices on carbon, pick up the latest issue of The New Economy, available online and in print now.

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