Why Business Models Fail

There are a lot of reasons why business models fail. Understanding them can help us better manage risks. In this post I sketch out the four main types of failure.

I've been thinking about failure a lot recently. As an early-stage software entrepreneur failure is starring at me big and ugly every morning. Yet, rather than just denying the possibility I prefer understanding and managing the risk of failure. And when I say "failure" I mean the big and hairy type that can put you out of business. In the brief video below I broadly categorized business model failures into four main reasons:

  • Solving an Irrelevant Customer Job
  • Flawed Business Model
  • External Threats
  • Poor Excution

My team and I of course aim to avoid the failures outlined above with the software company we're building. More importantly, however, we strive to provide the software-based tools that can help us manage the risk of failure in order to build prosperous businesses.

Learning videos, like this one (but produced more professionally) and the ones in my previous posts, will be an integral part of that software package...