Why is the failure rate of startups so high?

The most tragic categories of people who fail in entrepreneurship:

1. Those who are full of passion, sharpening their knives, renting a 200-square-meter office, and spending a large amount of money on renovations. Such people usually go out of business within six months.

2. Those who have never started a business before. The probability of failure for their first venture is 99%. The bigger the operation they set up, the more devastating the failure will be, leaving them unable to repay even their mortgage or car loan.

3. Franchising physical stores: 9 out of 10 are major pitfalls, requiring investments ranging from tens of thousands to hundreds of thousands of dollars, which are non-refundable and difficult to exit. This is the fastest way to go back to square one.

4. Paid traffic strategies in e-commerce: When newcomers ask me how to invest in traffic during live streams, I directly discourage them. Even experienced professionals need to lose money to explore paid traffic strategies, while newcomers are simply throwing money into a bottomless pit, essentially feeding the platform with free labor…

5. Those with annual incomes exceeding 1 million yuan have grown accustomed to high consumption, international schools, luxury cars, and full-time housewives. Forced to start a business after layoffs, their fixed mindset ensures inevitable failure. Entrepreneurship must begin with simplicity and hardship.

6. Those who start a business with credit cards and debt may seem to have no way out, but it is actually the beginning of a downward spiral. Delinquent payments and credit defaults mark the start of a nightmare for such entrepreneurs.

7. Entrepreneurship is inherently a low-success-rate endeavor, so the first step is to change oneself with the “minimum cost.”

8. Start in the most basic conditions: no employees, no rent, no inventory—you are the only employee. Work until you can't work anymore, and there may still be a glimmer of hope.

9. Let go of pride and ego; start with a mindset of starting from zero.

10. If possible, join an entrepreneurial circle and connect with positive-minded entrepreneurs. The first time you start a business, you’re often alone.

11. Find someone who’s already achieved results to mentor you; it’ll increase your chances of success. Many people tend to overestimate their own abilities.