Career Focus

Avoiding Startup Failure will be of interest to students who:

1. Plan to start their own companies, immediately after graduation or in the future
2. Have experienced a startup failure--of their own or of a company they were a part of--and want to build a narrative toolkit for talking to future employers and investors about the experience
3. Want to join a startup and are looking for tools to evaluate companies and founding teams they are considering working with
4. Intend to invest in startups or serve as startup advisors and board members
5. Are interested in corporate innovation and applying the patterns of startup failure to innovation initiatives or incubator programs within traditional corporations

Educational Objectives

Most startups fail. Avoiding Startup Failure focuses on understanding why startups fail and what entrepreneurs can do to anticipate and avoid failure.

Additionally, the course prepares prospective entrepreneurs, those interested in joining startups, and those interested in investing in startups with a toolkit to rebound from startup failure, allowing them to maintain their reputations, relationships, and the opportunity to found again.

Course Content

Through a series of cases and discussions with founders, students will have the opportunity to build an understanding of the common causes of startup failure and how companies and founders can avoid, or rebound from, failure.

Over the arc of the course, we will explore:

• Common patterns that lead to startup failure
• Frameworks to identify these patterns in early-stage and late-stage ventures
• Rebuilding a venture after a near failure
• Avoiding ethical lapses as startups struggle
• Tactical steps for managing a venture’s shutdown to preserve relationships, reputations, and integrity
• How to learn from a venture’s failure and what to do with those learnings
• Addressing founder burnout & weighing tradeoffs when deciding if and when to found again
• Communicating key lessons from a venture’s failure when pitching a next venture to potential employees, investors, and strategic partners

Most class sessions will focus on venture capital-backed startups, but the course will also examine entrepreneurial failure in other contexts, for example: science-based “tough tech” ventures; startups that aim for social impact; new ventures launched by established corporations; and bootstrapped, “low tech” businesses. The case protagonist will join as a guest in most sessions.

Students can choose to take a final exam or complete a final paper (alone or in pairs). The final paper can either address a topic approved by the instructor or one of the following topics:

• Using course frameworks, analyze factors that contributed to the failure of a startup of their choosing.
• Write a “pre-mortem” for a going concern—or a startup that students might plan to launch—analyzing the factors behind that startup’s imagined future failure.
• Analyze distinctive factors behind startup failure in a specific context or industry sector, for example, biotech, social enterprise, or emerging markets.

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