Lack of product-market fit is among the top reasons startups fail

CB Insights’ latest failure analysis is blunt: the biggest startup killer is still cash burn, but market fit is close behind.

The chart is based on 385 startup failures since 2023 and the categories are not mutually exclusive, so one company can appear in more than one reason.

• Ran out of capital: 70%
• Poor product-market fit: 43%
• Wrong market timing or macro conditions: 29%
• Unsustainable unit economics: 19%

A lot of “GTM problems” are really early assumption problems – the market story was never tested hard enough.

Data source: CBInsights
Related read: CustDev as GTM Risk Management for Fintech and Web3
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