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Ep. 962: Tom Eisenmann Interview with Michael Covel on Trend Following Radio

Tom Eisenmann
Tom Eisenmann

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If you want your startup to succeed, you need to understand why startups fail.

Why do startups fail? That question caught Harvard Business School professor Tom Eisenmann by surprise when he realized he couldn’t answer it.

So he launched a multiyear research project to find out. In Why Startups Fail, Eisenmann reveals his findings: six distinct patterns that account for the vast majority of startup failures.

  • Bad Bedfellows. Startup success is thought to rest largely on the founder’s talents and instincts. But the wrong team, investors, or partners can sink a venture just as quickly.
  • False Starts. In following the oft-cited advice to “fail fast” and to “launch before you’re ready,” founders risk wasting time and capital on the wrong solutions.
  • False Promises. Success with early adopters can be misleading and give founders unwarranted confidence to expand.
  • Speed Traps. Despite the pressure to “get big fast,” hypergrowth can spell disaster for even the most promising ventures.
  • Help Wanted. Rapidly scaling startups need lots of capital and talent, but they can make mistakes that leave them suddenly in short supply of both.
  • Cascading Miracles. Silicon Valley exhorts entrepreneurs to dream big. But the bigger the vision, the more things that can go wrong.

Drawing on fascinating stories of ventures that failed to fulfill their early promise—from a home-furnishings retailer to a concierge dog-walking service, from a dating app to the inventor of a sophisticated social robot, from a fashion brand to a startup deploying a vast network of charging stations for electric vehicles-—Eisenmann offers frameworks for detecting when a venture is vulnerable to these patterns, along with a wealth of strategies and tactics for avoiding them.

Eisenmann is a must for founders at any stage of their entrepreneurial journey.

Bio: Tom Eisenmann is the Howard H. Stevenson Professor of Business Administration at Harvard Business School (HBS) and the faculty co-chair of the Arthur Rock Center for Entrepreneurship.

In this episode of Trend Following Radio:

  • Harvard MBA Program
  • MBA Students
  • Definition of Failure
  • Venture Capital
  • Why Startups Fail
  • Startup Entrepreneurs
  • What is Scaling?
  • Failure Patterns

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