92% of Startups fail from poor management decision making

Another article reminds us of the pitfalls of startups, http://www.techvibes.com/blog/why-92-of-startups-fail-infographic-2012-06-18, where it states that for a variety of reasons, 92% of startups fail, or, basically, only 8% of startups survive. I believe that it uses the term, inconsistent, but I always attribute the “inconsistency” to a management team. All decisions stem from the management team – growth, customer acquisition, capital raising, technology adoption. So I always attribute those failures from decision making.

Recently, I received an email inquiring whether I knew of a qualified programmer to begin their phase 2 of their mobile app for 3 months. Having programmed myself, I knew that this inquiry had many defects. First, there are many programming languages, so what expertise was needed? Second, since the new developer had to follow up after another program, is there sufficient documentation to understand the previous work? Third, what was being asked to be developed?

I had informed the sender that the company needed a strong chief operating officer. I met that the management team, and from all appearances, the company needed an effective leader who understood marketing and technology. Instead, the company has decided to be “pennies wise and pounds foolish.”

The right COO would select the appropriate programmer, monitor the progress, and focus on marketing. Already, this company has had a history on not managing properly—taking years to develop a product that under the appropriate management could have been completed in less than a year.

Anyway, I have no fiduciary duty to this company. I simply conclude that it will fall in the 92% of failed startups. The company will find a programmer.  It will take longer than the expected 3 months for the reasons I stated earlier. Meanwhile, any potential revenue is delayed when desperately needed, increasing its chances for failure. And I sincerely believe that, under Darwinism, better companies with the best management have the best chance to survive.


About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP, jrzarco2001@yahoo.com, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy. http://www.docstoc.com/video/89135472/make-your-business-an-international-presence; http://www.youtube.com/watch?v=fx5gijf3yoc For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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One Response to 92% of Startups fail from poor management decision making

  1. Pingback: 92% of Startups fail from poor management decision making | Simple Advice for Entrepreneurs on Capital, Strategy, Legal Services, Management, Entrepreneurship, VC Funding and other things - http://www.crimsongrowthpartners.com

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