Why so Many Founders Fail—And How Few Succeed - Building a Startup Early Stage

After interviewing 47 founders and 16 industry experts in the past months, I've discovered a clear pattern on the two most common problems founders face ealry stage, what causes those problems and what strategies those founders adopt who are successful.

In this article, I'm sharing the essence of these conversations—a blueprint of actionable strategies to help you avoid common pitfalls and accelerate your startup's success. Each strategy comes with examples and ACTION-Items, so you can start implementing them right away.

Pressed for time? With this summary video you can decide if the article is worth reading or bookmarking:

What first-time founders struggle with:

Imagine this story of a founder: He is an entrepreneur at heart. He had an idea for a product which seems new and disruptive.

Excitement surges as he and his co-founder brainstorm solutions. Each idea builds upon the last, painting a vivid picture of the product. "Let's turn this into a startup!" they decided.

They dove headfirst into development, eyes set on a big launch in eight months. It's an exhausting grind—pulling all-nighters, obsessively tweaking the code. But it's worth it. They're convinced they're onto something big.

Launch day arrives after ten grueling months. The landing page is perfect, social media posts are queued, Product Hunt awaits. And then...

Silence. No signups. No upvotes. Nothing.

The disappointment is crushing, but they pushed on. They reached out to companies, sent emails, did cold calls. Still, progress was agonizingly slow. Rejection became familiar. Potential customers did not share their enthusiasm. They're not interested, not even willing to try the product for free.

After further investigation, they realized: The product doesn't match to what clients actually want and need.

Imagine facing this after dedicating almost a year of your life to your product.

This is just one way the core problems, which almost all early stage founders face, manifests.

So, what's going wrong here? It boils down to two painful mistakes and a core problem:

1. An Overemphasis on Product and Features: Focusing only on the idea, the product, the features, always adding, instead of making it simpler.
2. A Lack of Deep Understanding of Market and Customers: Not fully grasping their needs, desires, current solutions, motivations, and challenges.

These missteps feed into each other. Focusing too much on features blinds you to your customers' true needs. Without understanding your customers, you can't create features that genuinely matter to them.

The result? You can't build something customers love and want. You can't establish your startup in the market.

These mistakes are almost universal among early-stage founders—especially first-timers. Yes, they manifest differently for each person, but they're almost always present.

But here's the good news: By recognizing and addressing these challenges, you can avoid the deadly trap that so many fall into. Before we explore actionable strategies to tackle them, let's understand what causes thes problems.

Why do so many founders make those mistakes - even if they are aware of them?

At its core, the problem boils down to a single cause:

A lack of direct communication and feedback with customers, and a missing or flawed understanding of customer needs and the market at large. You end up developing your product in a silo, isolated from outside input.

But if many founders know this, why do so many still miss out?

The reasons are diverse and differ from founder to founder. Here are the most common ones in NO particular order:

1. Lack of Competency in Sales and Communication Especially for first-time founders, knowing how to find customers, establish relationships, make cold calls, send cold emails, and communicate effectively isn't second nature. This lack of skill and experience makes establishing feedback loops harder and slower—sometimes to the point where you might avoid it altogether.
2. A (Too) Deep Love for Your Idea and Product Passion for your idea is crucial. But this can become a huge pitfall. You may become so attached to your idea that your mind closes off to outside feedback. You might subconsciously avoid or misinterpret contradictory input. You can't see your product through the eyes of others, who view it with complete detachment. This rigidity leads you to focus solely on your product.
3. Lack of Emotional Intelligence This often goes hand in hand with overattachment to your product. Emotional intelligence involves dropping your preconceptions and immersing yourself in the customer's world, understanding their perspective deeply. Without this ability, you can get lost in a sea of feedback, unable to recognize basic patterns and emotional buyer/user motivations.
4. Being a Purely Technical Founder Highly technical people often fall prey to an overt product focus. You're excellent at technical tasks but less so in sales and communication. This highlights the importance of a balanced founding team. But this isn't absolute; some technical founders have mastered both aspects, which is an extremely powerful combination.
5. Not Integrating Customers from Day One Many founders build their product first and then talk to customers. Not involving them from day one in the development process is a very common issue.
6. Hiring and Systematizing Too Early Sometimes you might want to offload sales and communication, so you hire a head of sales. But this doesn't solve the problem. They can't sell like you as the founder, and you lose touch with your customers.
7. Fear, Self-Doubt, Anxiety, Procrastination Every founder deals with this—no exceptions. These emotions hinder you from tackling hard tasks. They often stop you from reaching out to customers because you fear rejection or, worse, discovering your idea isn't as great as you thought. But you're not alone. Be brave; it's not about eliminating these emotions but acting despite them. This is where growth happens.
8. Not Knowing the Strategies Lastly, not knowing how to actually go about building a company in the early stages is common for first-time founders. But there's a fix.

Take a moment to reflect: Do any of these causes resonate with you? All? None? Why? Try to detect what you're doing right and what you might need to change.

After doing this, here are the strategies which have proven to be the ones successful founders adopt and unsuccessful ones lack to.

Key Strategies Successful Founders Adopt

These strategies are highly actionable. You can take action immediately after reading this—and you should. They partly build on each other.

Let's dive in:

1. Be Hypotheses-Driven

This concept was first established in the startup context by Eric Ries and Steve Blank in the “lean startup” model with one basic premise:

When you start, you know close to nothing. All your assumptions are based on preconceptions. The model of writing a business plan, pitching to investors, assembling a team, introducing a product, and then starting to sell is outdated. This decreases your odds immensely since you lose flexibility and get attached to an arbitrary plan.

Instead, the model suggests that you

• experiment instead of plan
• value feedback over intuition
• and prioritize iteration over upfront development.

You do that by defining a set of hypotheses that you need to test and iterate quickly—a set of best guesses.

ACTION:

Here is one way to go about forming your first hypothesis.

1. Get a Business Model Canvas: Print it out or use a digital tool.
2. Brainstorm Basic Hypotheses: Fill in each field with your assumptions. (This Video will guide you through the 9 fields of the canvas)
3. Prioritize the Most Important Hypotheses: They mostly revolve around a customer segment and pain point.
4. Find Smart Ways to Test Them: Mostly through feedback and talking to customers and industry experts. (see strategy 2. & 3.)

This process gets your hypotheses out on paper, makes your assumptions clear, and gives you guidance on what to test first.

Your first hypothesis tests should revolve around your customer segment, which leads us to Strategy 2.

2. Find a Segment with an Urgent Problem

Market Segmentation is the process of dividing a broader market into smaller, distinct groups with similar needs. This enables you to tailor your product and marketing efforts effectively, without spreading yourself too thin (minimum viable segment).

The core goal here is to identify a customer segment that:

1. Has an Urgent, Underserved, Unworkable, and Unavoidable Problem (find out more about the 4U framework from Harvard here).
2. Is Willing to Change Its Situation to Solve That Problem.

This is especially important when making your first sales, as it's hard enough to sell as a startup without credibility, let alone selling to someone with no significant problem or willingness to change.

There are many ways to segment a market:

• Basic Hard Facts: Headcount, revenue, industry, etc.
• Indirect Factors: Technology adoption level, tech stack, etc.
• Non-Obvious Factors: Needs, motivations, pain points.

The non-obvious factors are the most valuable for messaging and customer understanding but the hardest to gather.

ACTION:

Don't overcomplicate defining the perfect segment upfront. Instead:

1. Define Basic Segmentation Factors.
2. Identify 2-3 Segments You See as Most Promising.
3. Start Getting Feedback Through Feedback Sessions (see Strategy 3).

Define about 10 companies and around 20 people per segment (different people in different positions within the same company are useful), and then talk to them.

As you engage with more people, you'll start to see patterns. Some will have problems; some will be willing to change. If you feel you're onto something, go deeper. Look into buyer personas and what would need to happen to get a deal.

Key things to consider:

• Talk only 10% of the time
• Listen closly, dig deeper and deeper when you find a hint of a problem
• Ask "why" 5 times (pealing pack layers of the onion)
• Drop your assumtions and be open to contradictory feedback

It's also helpful to talk to industry experts and get their take on how they would segment the market.

The next question arises: How do you get to talk to these people to test your hypotheses?

3. Use a Feedback Frame Instead of a Hard Sell

A huge problem for founders—especially those without an extensive network—is actually getting meetings with relevant people.

The challenging way is to try to sell instantly. Many founders prepare their pitch deck, write salesy cold emails, and "pitch-slap" potential customers to get a meeting. Especially before you've validated any of your hypotheses, this is a huge shot in the dark and often makes it really hard to get meetings.

The more frictionless approach is the so-called "feedback frame."

A feedback frame is more of an "I need help" instead of an "I need to sell" approach, and it's much easier to get meetings this way.

It bases on the premise that most humans actually want to help others—it's a primal instinct.

ACTION:

The basic message you want to convey, regardless of the channel, could look like this:

"Hey [Name], I just founded a new startup and am currently struggling with my value proposition. Would you be willing to give me some feedback on how you as a [company type] are dealing with [main pain point hypothesis] and where I might have things wrong?"

This approach has proven to be super effective for myself and many other founders and experts I've talked to.

Applied to different channels, it could look like this:

• Events: Walk up to people and share your feedback message👆. You can state your hypothesis directly and ask, "Where did I get this wrong?" or "Is this how things really work for you?" You can also ask if they're willing to invest 10 minutes into an online meeting and schedule a call on the spot. (I have a 100% conv. rate with this tactic and channel)
• Cold Calls: Say something like, "Hey [Name], I called you out of the blue, but is it okay if I give you 10 seconds of context on why I called, and you can decide whether we need to talk or not?" Most likely, they'll say, "Go on." State your feedback frame. Ask if they have 3-5 minutes now to give some feedback. If yes, dive in. If no, ask for a 10-minute call in the near future.
• Cold Emails/LinkedIn DMs: Send your feedback message and ask whether a 5-10 minute call is possible. If yes, schedule the call. If you're looking for 10-20 meetings, send out 100-250 messages. (I had 7,5% conv. rate here)

The point here is:

• Go out, ask for help.
• Have no expectation to sell.
• Try to build relationships.
• Be transparent about your story. Let people be invested in your journey.

Bonus: After each call (especially if you learned about a priority pain point), you can say, "Thanks so much for the feedback, [Name]. You mentioned that [Problem X] is a priority for you. Is it okay if I reach out in a few weeks with our approach to solving that problem?" That's where your first relationships are established to start initial projects later on.

4. Do Things That Don't Scale—Your First Project

As you keep your momentum through this process, you'll eventually see patterns and get a first glimpse of your ideal customer segment (or need to pivot to another one).

As soon as you find a few potential customers with a 4U problem (Urgent, Unavoidable, Unworkable, Underserved) who are willing to change, you can leverage the relationships you've established and initiate a project.

What many founders get wrong here is that they try to do everything in a "scalable way." They try to build the perfect product upfront, which could be multiplied to every customer. But as we've learned, this can be a huge pitfall. You want to integrate customers into your product development.

And you do that by doing things that don't scale. In this case, doing an individual project—almost like an agency.

ACTION:

Frame it something like this (ideally in a direct meeting):

"Over the past month, we've noticed that many [company type] face similar challenges with [specific problem], and we know we have a way to solve it. Would it be alright if I shared our approach with you?

Great! To solve Problem X, there are [X key steps/ features/ things to do]. But instead of presenting a generic fix, we'll develop and fit the solution to [customer specific situation]. As founders, we'll be directly responsible for the project—available anytime, even if it's 1 a.m.—ensuring it truly works for you. We'll keep pricing straightforward, set clear timelines, and make this an easy decision for you. Does that sound fair?"

Here you need to be creative. Adapt this framing to your product, customer type, and the problem you're trying to solve.

Do you have some sort of base product built already? Do you build it 100% custom? What's the timeline? Be flexible.

You might want to consult a mentor or expert, since this approach is highly individual.

In general, this approach works well because:

• You develop your product with one real-world problem in focus.
• You get the shortest feedback loops while building.
• You solve a real problem and create value.
• Your client feels valued and 'special.'

A few things to keep in mind when executing this strategy:

• Build it together with the client, working closely, possibly even on-site.
• Price your solution simply. Make it a no-brainer for your client.
• Monitor usage closely to understand where value is created.
• Think about how you could replicate your solution.
• Use this case study to approach similar clients.

By the way, doing things that don't scale is a crucial strategy for early-stage startups in general. I highly reccoment you reading Paul Grahams article on that here, or the post I did on that in short-form here.

5. Leverage the Right Channels

In reality, you'll need to do a lot of outreach to establish relationships and land your first paid projects. This takes time.

One general rule you should follow:

The More Personal, the Better:

• In B2B, you want to build close personal relationships.
• Just hiding behind your screen sending emails won't cut it.

ACTION:

This approach seems to be super effective in early stages and many founders use something more or less similar to initiate relationships:

1. Plan to Attend a Relevant Industry Event.
2. Scout Potential Customers or Stakeholders in Advance.
3. Send Them an Email, saying you saw they'll be at the event too. Offer something valuable like, "We have some ideas on how to solve [specific problem]. Would love to exchange some thoughts with you at the event." or “We have prepared a marked analysis, comparing the GTM-performance of [most important competitors]. Would be happy to share our learnings with you”.
4. Connect with Them via LinkedIn with a simple message: "Just putting a face to the name :)"
5. Chat a Bit on LinkedIn, ask where you can meet them at the event.
6. Talk to Them in Person. Build relationships.

The key points:

• The more personal and direct of an approach, the better.
• Offer something of value that's low effort for them.
• Be relevant (in regards to their priorities).
• Leverage multiple channels.
• Prioritize personal interactions.

Build your strategy for reaching out and connecting around that. At the very beginning, this doesn't need to be super scalable. Rather, test out what mix works for you. Remember, be hypotheses-driven.

One addition:

Network is a huge leverage here. If you have relevant network, use it! Intros are still the most effective ways to establish relationships. If you have no network, try to offer free value in every interaction and you will build relationships that last you long and will prove to be super helpful on your journey.

6. Learn by Doing—Fail Fast

All these tactics require practical skills and experience, things many first-time founders simply lack.

The good news: This state of deficiency is temporary.

One key trait that separates successful founders from the pack is their ability to move (and fail) faster than others. They learn information (like in this article), implement it, expose themselves, fail, learn, and repeat. The faster you fail and learn, the quicker you'll move through the temporary stage of inexperience.

The problem is: Failing is painful. Our instinct often makes us avoid exposing ourselves to failure.

ACTION:

To overcome this mental barrier, adopt the following failure-driven mindset:

Mistakes and failures are your means of education. They reveal your own inadequacies. Your failures also allow you to see the flaws in your ideas and execution.

There are two kinds of failures:

1. Never trying to work on your ideas because you're afraid or waiting for the right moment. Here, you never learn.
2. A bold and venturesome spirit. If you fail here, the hit to your reputation is greatly outweighed by what you learn.

Repeated failure will toughen your spirit and show you with absolute clarity how things must be done.

Act on your ideas as fast as possible, exposing them to the public—a part of you even hoping that you fail. You have everything to gain.

To put this into practice, here are some tactical strategies to implement the learning cycle:

The Failure Résumé:

Create a document where you list your failures. Every time you execute a hypothesis and hit a roadblock, document what you did and note:

1. What went wrong? What wrong assumption did you make?
2. Key takeaways—what to do differently in future decisions?

Plan for Failure:

This might seem odd, but every time you plan a major project or task, specifically list out all the things that could go wrong.

Our natural tendency is to only look at how things could go right, making us blind to potential weak spots and making failure 10 times more painful.

By listing what could go wrong, you train your mind to spot weaknesses in your idea, making you a better observer of your actions. Also, many obvious mistakes surface upfront, which you can avoid altogether, making it easier to find the things that actually work.

Note: Don't overfixate on this. We might be tempted to disregard many of our ideas quickly. That's not the point. You can only validate through implementing. See this more as a mental workout, giving you a more rounded view and helping you see things from different angles.

7. Develop Emotional Intelligence

As data and AI evolve and become central in all business aspects, the trait of emotional intelligence often gets overlooked.

Interestingly, this topic directly or indirectly surfaced in so many conversations I had.

So, what is emotional intelligence in short?

It's the ability to manage one's own emotions as well as understand those of others without preconceptions and biases. Emotional intelligence enables you to navigate social complexities elegantly and make informed decisions.

Why is this so important?

To illustrate, here's a story from my own entrepreneurial journey:

We offered a lead-gen service to an IT company tired of cold calls and reliant on referrals. We zeroed in on the CEO during discovery—figured he was the decision-maker.

Discovery went great. He had a clear pain point and was eager for change.

He mentioned a Sales Manager and a Marketing Manager who were responsible for generating leads but struggled. Instead of hearing them out first, we scheduled a pitch meeting with all three.

When we pitched, the other two were hearing it for the first time. They were skeptical and threw out every objection: "Doesn't work for us."; "We're different."; "We need to do X first."

We felt the resistance. Meetings got canceled. Decisions were put off. Then came the email from the Sales Manager: deal cancelled. The CEO was CC'd. When I called him, his initial interest and trust were gone.

What went wrong?

In part: We failed to recognize the emotional needs of all stakeholders. We failed to navigate the power dynamics of the team elegantly.

The sales manager had initiated projects like cold-call training to get more leads. The marketing manager had tried to generate leads through experimentation but wasn't successful. And here we came, telling them, "What you've been doing isn't effective; we'll fix it."

These two had no actual decision power but influenced the CEO in his descision.

And to be clear here: We as entrepreneurs are to blame here for not addressing the needs of all stakeholders. This mistake stemmed from our lack of emotional intelligence.

We should have:

• Included them earlier, possibly in one-on-one meetings.
• Listened to them, spotting that power dynamics and emotions were at play.
• Acknowledged their efforts, giving them validation.
• Helped them frame the success of working with us as their own success, granting them credit if the problem was solved.

If we had aligned their needs with our solution, they might have supported us through the process.

The ideal procedure mentioned here is often called "getting a champion"—someone supporting you. But you won't be able to make use of it if you fail to foster your emotional intelligence to see through the surface actions of others, revealing deeper motivations.

How Does This Translate to Startup building?

Such patterns manifest in every social setting where two or more people interact:

• During feedback calls, the person might not give honest feedback out of politeness.
• Team conflicts may arise because people (or you) manifest envy or passive aggression.
• Understanding customer motivations becomes challenging when they only verbalize surface-level, factual motivations.
• Handling objections becomes difficult when you fail to realize where they're actually coming from.

ACTION:

So, how can you learn and implement this?

Here are core principles to cultivate this feeling and intuition. Remind and reflect on them regularly, and you'll build emotional intelligence naturally over time.

• Recognize that every human has emotional needs that often manifest indirectly.
• Acknowledge that you have these emotional needs too.
• Understand that you have preconceptions and biases, making you blind to the inner world of others.
• Notice when you project your preconceptions onto others, take a step back, and view the situation from their perspective.
• Listen 95% and talk 5%.
• While listening, deeply observe. Avoid constantly thinking, "What do I say next?" or "What are they thinking about me/my solution?" Just listen and observe.

By adopting these principles, you'll become more sensitive over time and help cultivate your emotional intelligence.

With this power unlocked:

• You'll understand feedback better and deeper.
• You'll navigate buying processes smoothly.
• You'll move and influence people with your ideas.
• You'll spot manipulations that hinder you from advancing.
• You'll deeply understand your customers' world.
• You'll become a master observer, enabling you to act upon feedback faster and more accurately.

EI is such a core principle in understanding human behavior and will yield immensely powerful results for your entrepreneurial journey!

Whats next?

It's pretty simple. Implement, fail, learn (by doing).

By applying these strategies, you're well on your way to avoiding common pitfalls and accelerating your startup's success. Remember, the journey of a founder is filled with challenges, fear, self-doubt..., but with the right mindset and tools, you can navigate them effectively.

Now, go out there, take action, and transform this knowledge into tangible results.

Credits

This article is the result of my bachelors degree, where I interviewed 16 b2b Startup experts and founders. The knowledge and strategies are derived and extraxted from their input and this would not be possible without them (mentioned in post of this article). Also a big thank you to, all those early stage founders, willing to give me feedback and let me get to know their struggles and strategies.