"Why Startups Fail" by Thomas Eisenmann
In 2021, while working as an external journalist for the Korea Institute of Startup & Entrepreneurship Development, I encountered a wide variety of startups. They ranged from those experiencing rapid growth to others that had been treading water for over seven years.
When talking with founders of slower-growing startups, I expected to see the typical fatal flaws or risks often associated with entrepreneurs. However, these weren't readily apparent. Many of these founders had impressive track records at their previous companies and were often talented individuals who had left promising careers at major corporations. With such diverse backgrounds and personalities, it was challenging to pinpoint the exact reasons for their startups' slow growth.
Recently, I came across a book that helped me understand why identifying the causes of startup failure is so difficult. Humans tend to oversimplify the reasons behind both good and bad outcomes. Philosophers call this the "single cause fallacy."
For example, people might attribute a presidential candidate's loss to "failing to win over swing voters," or a sports team's poor season to "losing a star player to injury." In reality, such outcomes result from a complex interplay of numerous factors.
It's overly simplistic to blame startup failure solely on the founder or employees. To truly understand the situation, we need to consider the intricate web of relationships between various stakeholders involved in startups. Fortunately, the author, Thomas Eisenmann, was able to objectively analyze a diverse group of entrepreneurs thanks to his research and lectures at Harvard Business School, where he met many HBS graduates who had become founders.
While most existing books on startups and entrepreneurship rely on theoretical models, econometric analyses, or large-scale surveys, Professor Eisenmann gathered information through meticulous case studies and in-depth individual interviews. He didn't just listen to founders' stories but also interviewed investors to understand why startups they had founded or funded failed to succeed.
Professor Eisenmann has counseled many entrepreneurs facing the decision to shut down their businesses and witnessed countless times what happened after they made their choices. During conversations with the author, these founders openly expressed raw emotions like anger, guilt, sadness, shame, and regret. Some couldn't accept the reality of failure and displayed deep frustration.
Who could blame them for their shattered dreams, damaged relationships, and crumbling self-esteem? Overcoming the emotional and professional losses from company failure is no easy task for entrepreneurs. In his book, Professor Eisenmann addresses how entrepreneurs can face failure, providing guidance on managing emotions, facing reality, and using these insights to plan their next steps.
When I was asked to review this book by BusinessBooks, I initially hesitated. Many translated books often suffer from mistranslations or awkward phrasing that distort the original meaning. However, "Why Startups Fail" reads as naturally as if it were originally written by a Korean author. While reading, I never once doubted whether the message accurately reflected the author's original intent. Personally, this is the most satisfying and relatable translation I've encountered since "Bernie Sanders' Political Revolution" and "The Brain Sell."
This book is a must-read for all entrepreneurs dreaming of creating a Korean unicorn, whether they're facing a crisis or looking to expand their success. Had they read this book in advance, entrepreneurs might have been better equipped to navigate difficulties without panic and find paths with lower risk of failure, thereby increasing their chances of success.
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