Creating a business is a daring bet, but the statistics are ruthless: nine out of ten companies do not survive their first five years. Conversely, a handful of entrepreneurs manages to build flourishing societies, which cross crises and experience dazzling growth. Why this difference? Those who succeed apply specific strategies and avoid the traps that condemn others. Recent French examples show that success is not by chance: it is based on clear strategic choices and flawless execution.
A poorly chosen market condemns the company even before its launch
The main error of entrepreneurs who fail is to get into a market without real opportunity. Too often, an idea seduces its creator but has no sufficient demand. This was the case with Take Eat Easy, a meal delivery startup that closed in 2016. Its concept was promising, but its market was already dominated by Uber Eats and Deliveroo, which had far superior financial means. Conversely, companies like Doctolib have been able to identify a crucial need. Before his arrival, making medical appointments was a real headache. By providing a simple and effective solution, Doctolib has experienced dazzling growth and has established itself as a key player in the health sector.
Choosing a promising market means ensuring that there is a strong unsatisfied demand and that you can insert ourselves with a single value proposal. Those who do not validate this hypothesis from the start take the risk of disappearing before even having really started.
Unmanned cash flow leads to failure, even with a good product
A product can attract customers, but without rigorous financial management, the company runs to disaster. Cash is one of the most critical points in the first years. Too many entrepreneurs spend without counting after a first fundraising, believing that income will follow naturally.
The example of Sarenza, a historic actor in the sale of online shoes, illustrates this danger well. The company experienced a promising start but burned its capital in marketing and customer acquisition too quickly, making its profitability untenable. It had to be sold in an emergency to avoid bankruptcy.
Conversely, Back Market has controlled its growth by controlling its costs from the start. Rather than investing everything in advertisements, the startup has bet on organic marketing and an optimized customer experience, guaranteeing healthy and sustainable growth.
Do not adapt to the market is to sign your death stop
Failing companies are often those that refuse to rotate when a model does not work. The obstinacy to persevere in a bad direction is a fatal error.
The fork (formerly the fork) was able to avoid this trap. When it started, its model was limited to the reservation of restaurants, but that would not generate enough income. By integrating discounts of discounts and recommendations, she transformed her model and multiplied her turnover, until her takeover by Tripadvisor.
Other companies have not had this flexibility. Viadeo, a French professional social network, was unable to evolve against Linkedin and disappeared for lack of rapid adaptation to new user expectations.
It is therefore a question of testing, analyzing and readjust the strategy at the right time. Those who cling to a fixed idea, without taking into account customer feedback and market developments, take on a considerable risk.
Surround yourself with bad people leads to implosion
Another major reason for failure is a bad entourage. An entrepreneur cannot do everything alone. If he surrounds himself with collaborators or partners who do not share the same vision or do not have the required skills, he jeopardizes his project.
The story of Blablacar proves the importance of a solid team. Frédéric Mazzella had a strong idea, but it was by recruiting talents like Nicolas Brusson and Francis Nappez that he managed to structure his business and make it a world leader in carpooling. Conversely, many startups fail due to internal conflicts between partners. A project can be promising, but if tensions appear within the management team, they can quickly paralyze the business and precipitate its fall.
Depending on paid marketing is a short -view strategy
The frequent error of the collapsing companies is to believe that advertisements are enough to create sustainable growth. They invest massively in customer acquisition, but as soon as they reduce their marketing budget, their sales fall suddenly. This is what happened to Made.com, an online design furniture brand. Its model was based on a strong advertising investment, but when its acquisition costs have become too high, its economic model has no longer held.
The exploding companies apply simple but powerful principles
If 90 % of companies fail, it is because they fall into avoidable traps. They choose poorly calibrated markets, manage their cash flow, refusing to adapt, surround themselves with bad people and depend too much on paid marketing.
Conversely, those which explode apply clear principles: they identify a strong market opportunity, master their financial management, know how to rotate, recruit talents aligned with their vision and build a notoriety that goes beyond advertising.
Entrepreneurship success is not based on luck, but on thoughtful strategic decisions. Those who apply these principles considerably increase their chances of being part of the 10 % club that thrives.
