Nine out of ten startups fail before they get to their second or third year of operations, according to studies conducted by several academic and financial institutions specialized in business and market intelligence. We financially calculated this global failure rate and found that it equals to more than USD $10 billion in annual loses. This figure is associated with investments and funds with no return.
Part of the Innovation Hacking Lab team has validated this alarming pattern throughout more than thirty years of experience in startups and innovation projects. In fact, only 3 out of our 24 projects have survived for over three years and generated a 100% return on investments. Thus, our Innovation Hackers have created sustainable economic value for more than five years through these successful businesses.
After studying, analyzing, and validating the pattern of failure on over 300 innovation and entrepreneurship projects in Latin America, we concluded that the fundamental drivers of such statistics are the following:
– Many people who try to start a new business don’t know what, for whom and how to innovate because they lack a formal, continuous education that’s direct, contextualized, and practical so it enables them to discover, validate, develop, and manage projects and opportunities of sustainable businesses.
– A significant number of entrepreneurs don’t efficiently apply adequate methodologies and tools to model, simulate, experiment, and continuously adjust product prototypes and businesses with minimum commercial, productive, technological, administrative, logistical, legal, and financial risks.
– Generally, entrepreneurs don’t know how to structure, sell, and negotiate the necessary funding to develop and launch sustainable business projects.
Innovation Hacking Lab was born to satisfy the needs around these causes involving entrepreneurs and innovative organizations. Our goal is not only to contribute to the development of financially viable and sustainable models but also to boost human-centered projects and the continuous improvement of people’s quality of life.