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Why do most Internet Startups Fail?

It is common knowledge among venture fund managers and venture capitalist that the Vast majority of startups out there whether in the tech field or not will fail. That’s just the nature of the beast. You can’t hit a home run all the time. In fact, you can’t even hit the ball half the time. The best of venture capitalists actually have a batting average of maybe 33%, and that’s if you’re really good. That’s if you’ve done your homework, and you’re plugged into a competent network of competent people and managers. The reality is that there are so many ways seemingly hot idea can fail. Sadly, the startup industry and angel investing, in general, is set up to turn on ideas. While on its face, there’s a lot going for this model, after all, great businesses are built on great ideas. The problem is if the focus is so much on the idea instead of context and execution, a lot can be lost in translation. You may end up spending a lot of your hard-earned investment capital in companies like Digg and overlooking companies like Instagram. The reality is that ideas can only take you so far. It’s probably a better approach to focus on building a company on performance. A lot of startup founders get caught up in being first. This is why so many startup companies fail. You’re in such a rush to be that first with your idea that you didn’t fully develop your idea. In other words, you’re the first to market but the idea is half-baked. See what wrong with this picture?

Solid companies are companies that build systems. Systems are crucial to making sure that regardless of what the world throws your way, whether in terms of market changes, traffic changes in consumer tastes and fashions, whatever, your company will not just adopt but also thrive. That is what separates a Facebook from a Twitter. This is why Facebook is fast shaping to be possibly another Google. This company has really blown away much people’s initial impressions. They taught this was a static one-trick pony play, but it continues to evolve and really escape any easy categorization and definition. That is part of its magic, and that’s why the company is trading north of 50 dollars today. If you have a startup company, you shouldn’t focus so much on the idea but on the system that produces ideas. Very big difference. When you focus on the system, you focus on something that can change with the times but at the same time add as much value to the underlying idea that you’re trying to push forth. Too many founders are wedded on a particular expression of an idea. They are uncomfortable with outcomes that deviate from their conception of what the idea should look like in real life. Unfortunately, that’s not how the real-world works. The real world changes on a dime. The real world turns on many directions and it is often affected by many different factors. In other words, life is what happens when you’re making other plans. If you are too focused on your plan, on your fixed idea, chances are, you will fail. Regardless of how many investors you find to throw money in your idea if its fixed and it doesn’t have an underlying system, it’s gonna stagnate at best or outright die.