Why do startups fail in the U.S.? (and how not to…)

According to survey done by CB Insights in February 2018 among 101 startup failures post mortem, the 3 reasons why startups failed in the U.S. were:

  1. No Market Need (42% of the answers)
  2. Ran out of Cash (29% of the answers)
  3. Not the Right Team (23% of the answers)

I find this results particularly informative as it destroys several common myths international entrepreneurs might have when entering the U.S.

  1. U.S startups also struggle to find their product-market fit even if they are on their domestic market
  2. Cash is not that accessible especially for startups that did not find their Product-market fit
  3. Even if you have tremendous talents, attracting them is not an easy task.

Now I find even more instructive to compare these results with an older study done by the DGE (General Direction of Enterprises) with the trade organization TechInFrance (former Afdel) about the reasons why French entrepreneurs were struggling to become international leaders.

  1. The lack of marketing culture
  2. The lack of funding
  3. The lack of international business culture

It is interesting to see that similarities between the two studies, which show that French entrepreneurs will obviously face the same challenges as the US ones: Product-Market fit and lack of funding but will add on top of it the need to adapt to a different business culture.

The good news is that more and more French entrepreneurs are showing the path and sharing the best practices! But my 2-cents is that there are three rules to follow to succeed in the U.S.:

  1. Do not underestimate the cultural gap
  2. Hit the perfect timing to enter the U.S. market with a lean approach
  3. Build the right team at the right time

I will be happy to detail these 3 rules with you. Just send me a note for a chat or let me know your thoughts!

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