Course description

Embarking on an entrepreneurial journey is an exhilarating endeavor, but it's essential to acknowledge the stark realities that come with it. While success stories often make headlines, the world of entrepreneurship is also riddled with failures. Let's delve into some statistics that shed light on the challenging landscape of entrepreneurship, along with real-life examples that illustrate these facts.

High Failure Rates

Statistic: Around 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years.

Example: One of the most prominent examples is the technology company Webvan, which aimed to revolutionize online grocery shopping. Despite raising billions in funding during the dot-com era, it filed for bankruptcy in 2001, becoming one of the poster children for the excesses of the time.

Lack of Market Fit

Statistic: Approximately 42% of startups fail because they didn't solve a market need.

Example: Juicero, a startup that created a high-tech juicing machine, is a notable example. Despite raising substantial capital and generating buzz, the product failed to address a genuine consumer problem, as users discovered they could achieve similar results by simply squeezing the juice packs with their hands.

Insufficient Funding

Statistic: Insufficient funding accounts for 29% of startup failures.

Example: Zirtual, a virtual assistant service, abruptly shut down in 2015 despite having a substantial user base. The company couldn't sustain its growth due to sudden financial challenges, highlighting the critical importance of managing finances effectively.

Team Dynamics and Leadership

Statistic: 23% of startups fail due to inadequate team dynamics and poor leadership.

Example: Quirky, a platform for inventors to turn their ideas into products, closed its doors in 2015. The company's rapid expansion and lack of focus led to internal conflicts and challenges, ultimately contributing to its downfall.

Lack of Profitability

Statistic: A lack of profitability is responsible for 42% of startup failures.

Example: Fab.com, an e-commerce platform for design-oriented products, raised substantial funding and reached a valuation of over $1 billion. However, the company's aggressive growth strategy, heavy spending, and discounts led to massive losses, ultimately resulting in its closure.

Failure to Pivot or Adapt

Statistic: 74% of high-growth internet startups fail due to premature scaling.

Example: Blockbuster's failure to adapt to the changing landscape of movie rentals and embrace digital streaming ultimately led to its demise. The company had opportunities to acquire or partner with emerging streaming services but failed to recognize the significance of the shift.

What will i learn?

Characteristics of Successful Entrepreneurs
Deciding to Pursue Entrepreneurship
Skills You Need to Be an Innovative Entrepreneur
How to Find the Right Entrepreneurship or Innovation Course for You
Entrepreneurship Opportunities in Healthcare

Requirements

None

Frequently asked question

An entrepreneur’s personal and business goals are inextricably linked. Whereas the manager of a public company has a fiduciary responsibility to maximize value for shareholders, entrepreneurs build their businesses to fulfill personal goals and, if necessary, seek investors with similar goals.

Long-term sustainability does not concern entrepreneurs looking for quick profits from in-and-out deals. Similarly, so-called lifestyle entrepreneurs, who are interested only in generating enough of a cash flow to maintain a certain way of life, do not need to build businesses that could survive without them. But sustainability—or the perception thereof—matters greatly to entrepreneurs who hope to sell their businesses eventually. Sustainability is even more important for entrepreneurs who want to build an institution that is capable of renewing itself through changing generations of technology, employees, and customers. Entrepreneurs’ personal goals should also determine the target size of the businesses they launch. A lifestyle entrepreneur’s venture needn’t grow very large. In fact, a business that becomes too big might prevent the founder from enjoying life or remaining personally involved in all aspects of the work. In contrast, entrepreneurs seeking capital gains must build companies large enough to support an infrastructure that will not require their day-to-day intervention.

Building a sustainable business—that is, one whose principal productive asset is not just the founder’s skills, contacts, and efforts—often entails making risky long-term bets. Unlike a solo consulting practice—which generates cash from the start—durable ventures, such as companies that produce branded consumer goods, need continued investment to build sustainable advantages. For instance, entrepreneurs may have to advertise to build a brand name. To pay for ad campaigns, they may have to reinvest profits, accept equity partners, or personally guarantee debt. To build depth in their organizations, entrepreneurs may have to trust inexperienced employees to make crucial decisions. Furthermore, many years may pass before any payoff materializes—if it materializes at all. Sustained risk-taking can be stressful. As one entrepreneur observes, “When you start, you just do it, like the Nike ad says. You are naive because you haven’t made your mistakes yet. Then you learn about all the things that can go wrong. And because your equity now has value, you feel you have a lot more to lose.” Every company has its own story to tell about the development of systems and strategy. Entrepreneurs who operate small-scale, or lifestyle, ventures face different risks and stresses. Talented people usually avoid companies that offer no stock options and only limited opportunities for personal growth, so the entrepreneur’s long hours may never end. Because personal franchises are difficult to sell and often require the owner’s daily presence, founders may become locked into their businesses. They may face financial distress if they become sick or just burn out. “I’m always running, running, running,” complains one entrepreneur, whose business earns him half a million dollars per year. “I work 14-hour days, and I can’t remember the last time I took a vacation. I would like to sell the business, but who wants to buy a company with no infrastructure or employees?”

Entrepreneurs must reconcile what they want with what they are willing to risk. Consider Joseph Alsop, cofounder and president of Progress Software Corporation. When Alsop launched the company in 1981, he was in his mid-thirties, with a wife and three children. With that responsibility, he says, he didn’t want to take the risks necessary to build a multibillion-dollar corporation like Microsoft, but he and his partners were willing to assume the risks required to build something more than a personal service business. Consequently, they picked a market niche that was large enough to let them build a sustainable company but not so large that it would attract the industry’s giants. They worked for two years without salaries and invested their personal savings. In 10 years, they had built Progress into a $200 million publicly held company. Entrepreneurs would do well to follow Alsop’s example by thinking explicitly about what they are and are not willing to risk. If entrepreneurs find that their businesses—even if very successful—won’t satisfy them personally, or if they discover that achieving their personal goals requires them to take more risks and make more sacrifices than they are willing to, they need to reset their goals. When entrepreneurs have aligned their personal and their business goals, they must then make sure that they have the right strategy.

Many entrepreneurs start businesses to seize short-term opportunities without thinking about long-term strategy. Successful entrepreneurs, however, soon make the transition from a tactical to a strategic orientation so that they can begin to build crucial capabilities and resources. Formulating a sound strategy is more basic to a young company than resolving hiring issues, designing control systems, setting reporting relationships, or defining the founder’s role. Ventures based on a good strategy can survive confusion and poor leadership, but sophisticated control systems and organizational structures cannot compensate for an unsound strategy.

The lack of talented employees is often the first obstacle to the successful implementation of a strategy. During the start-up phase, many ventures cannot attract top-notch employees, so the founders perform most of the crucial tasks themselves and recruit whomever they can to help out. After that initial period, entrepreneurs can and should be ambitious in seeking new talent, especially if they want their businesses to grow quickly. Entrepreneurs who hope that they can turn underqualified and inexperienced employees into star performers eventually reach the conclusion, along with Intuit founder Cook, that “you can’t coach height.” Moreover, after a venture establishes even a short track record, it can attract a much higher caliber of employee. In determining how to upgrade the workforce, entrepreneurs must address many complex and sensitive issues: Should I recruit individuals for specific slots or, as is commonly the case in talent-starved organizations, should I create positions for promising candidates? Are the recruits going to manage or replace existing employees? How extensive should the replacements be? Should the replacement process be gradual or quick? Should I, with my personal attachment to the business, make termination decisions myself or should I bring in outsiders? A young venture needs more than internal resources. Entrepreneurs must also consider their customers and sources of capital. Ventures often start with the customers they can attract the most quickly, which may not be the customers the company eventually needs. Similarly, entrepreneurs who begin by bootstrapping, using money from friends and family or loans from local banks, must often find richer sources of capital to build sustainable businesses. Entrepreneurs who hope to turn underqualified employees into star performers are almost always disappointed. For a new venture to survive, some resources that initially are external may have to become internal. Many start-ups operate at first as virtual enterprises because the founders cannot afford to produce in-house and hire employees, and because they value flexibility. But the flexibility that comes from owning few resources is a double-edged sword. Just as a young company is free to stop placing orders, suppliers can stop filling them. Furthermore, a company with no assets signals to customers and potential investors that the entrepreneur may not be committed for the long haul. A business with no employees and hard assets may also be difficult to sell, because potential buyers will probably worry that the company will vanish when the founder departs. To build a durable company, an entrepreneur may have to consider integrating vertically or replacing subcontractors with full-time employees.

An organization’s capacity to execute its strategy depends on its “hard” infrastructure—its organizational structure and systems—and on its “soft” infrastructure—its culture and norms. The hard infrastructure an entrepreneurial company needs depends on its goals and strategies. Some entrepreneurs want to build geographically dispersed businesses, realize synergies by sharing resources across business units, establish first-mover advantages through rapid growth, and eventually go public. They must invest more in organizational infrastructure than their counterparts who want to build simple, single-location businesses at a cautious pace.

Entrepreneurs who aspire to operate small enterprises in which they perform all crucial tasks never have to change their roles. In personal service companies, for instance, the founding partners often perform client work from the time they start the company until they retire. Transforming a fledgling enterprise into an entity capable of an independent existence, however, requires founders to undertake new roles.

Do You Have What it Takes?
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Is starting a business the right choice for you?
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Essential Skills You Need to be an Innovative Entrepreneur
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Learning is Inevitable
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Identifying the Opportunities
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Levi Cheptora

CEO/Founder, Doctors Explain Digital Health Co. Ltd.

CEO & Founder at Doctors Explain Digital Health Co. LTD.|| Software Engineer|| Digital Health Consultant|| Assistive Technology & Digital Inclusivity Agent|| Creative-Nonfiction Published Author|| Healthcare Entrepreneur

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Startup Founder

Free

Lectures

5

Skill level

Beginner

Expiry period

Lifetime

Certificate

Yes

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The Basics: How to Get Started as an Entrepreneur

Course description

What will i learn?

Requirements

Frequently asked question

Clarifying Goals: Where Do I Want to Go?

What kind of enterprise do I need to build?

What risks and sacrifices does such an enterprise demand?

Can I accept those risks and sacrifices?

Setting Strategy: How Will I Get There?

Do I have the right resources and relationships?

How strong is the organization?

Can I play my role?

Characteristics of Successful Entrepreneurs 1 Lessons Hours

Deciding to Pursue Entrepreneurship 1 Lessons Hours

Skills You Need to Be an Innovative Entrepreneur 1 Lessons Hours

How to Find the Right Entrepreneurship or Innovation Course for You 1 Lessons Hours

Entrepreneurship Opportunities in Healthcare 1 Lessons Hours

Levi Cheptora

Startup Founder

Carolyne Bonareri

5

Bryan Linturi

5

Faith Amisi

5

Caroline Omuse

5

Luke Mwaipaja

5

Sam Okere

5

Robai Momanyi

5

Gladyce Achieng

5

Carolyne Abongo

5

Jane Maina

5

Shadrack Loltome

5

Sharon Wanjiku

5

Shaban Rajab

5

Peter Aluku

5

Bonface Menjo

5

Leah Christine

5

Emma Ptala

5

Free

Lectures

5

Skill level

Beginner

Expiry period

Lifetime

Certificate

Yes

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