What’s People-led, Design-fed?

Built to—fail?

Approximately 90% of startups fail. That sucks. 

It sucks for founders.

It sucks for investors, too. 

But the real question is: what do we do about it? Do we just accept it like a mediocre softball batting average—crummy odds, just part of the game? 

Nah. We learn from it. 

Ever hear this quote? “It’s not failure if you learn something.” 

With this mindset, what can we learn from startup failure? Are people’s ideas just that bad, or are there factors that–if we could name them–could be used to nudge the rate of startup success higher?

So why do most startups go under?

What do you think? Jot down two answers to the question: Why do most startups fail?

(go for it, we’ll wait here_)

Below is a study from CB Insights that we found on “failed” tech founders. It shows the top 20 responses from 350+ founders on why their startups failed. How does it compare to what you wrote?

Even though this survey is based on a relatively small subset of all founders/startups, we find the list pretty comprehensive. 

So let’s take a closer look to see what stands out and what patterns we see. 

Ticking down the list, how many are related to a failure to stay connected, test ideas, and ultimately provide benefit to the people on the outside of the company (customers, users)? This is often referred to as some derivative of “market fit”—whether that be product/price/channel/etc. 

Now…how many are related to a failure on the part of the “internal team”, such as poor leadership/vision, lack of teamwork, or ill-defined values and culture? 

Collectively, 15 of the top 20 reasons that startups fail have something to do with people.

Ah! So this is what we mean when we refer to startups being “people-led”: it’s about how well startups establish and maintain connections to the people outside and inside their company.  

This is amazing, right? We’re onto something! 

Slow down. Truth? None of this is a secret to anyone. 

Knowing why something fails doesn’t mean you know how to fix it.

When we went out into the world of venture and startups, we heard and saw many of the same causes of failure in the charts above (we conducted tons of in-depth industry interviews, reviewed hours of podcasts and videos, and researched hundreds of written opinion pieces and articles).

Turns out, these overarching issues of “outside and inside people” aren’t new or unnoticed by venture capitalists or founders.

Okay. So then why are they still plaguing startups every day?

Because–saying you “focus on people” is simple. But actually doing the work is super challenging–because people themselves are dizzyingly complex.

To really focus on people, you need the right mindsets. You need a set of tools and processes to fall back on. You need to get the right kind of guidance and support.

This is where design comes in.

Design is ROOTED in human needs. It’s been around forever and practiced as a modern discipline for more than 40 years. It's the underlying force behind some of the most iconic products and services in our lives today.

But design isn't a creative ‘black box’ or a series of steps to go through—it’s a set of principles and mindsets that, when practiced well, can help solve nearly any challenge that you as a founder will encounter.

Design tools can help you determine strong value propositions, develop revolutionary sales channels, stand up successful business lines, nail down pricing, and build a persuasive pitch deck. It can even help you craft rewarding culture, lead with confidence, and hire great people.

The best part? Being fed by design isn’t about hiring a designer or becoming one yourself, and it doesn’t mean that you spend your time and resources on monthslong design “sprints.”

Instead, it’s about having an open, curious mind. It’s a willingness to learn and iterate. It’s about being able to shift from high to deep, from slow to fast. It’s the patience and penchant for asking questions, listening to the answers, and taking action.

For startups, the tools of design provide a versatile, effective way of working on all parts of your business while keeping people at the core.

Let’s bring it home.

This isn’t a panacea for all startups; we know there are many unique challenges that founders take on when building their business. Instead, we present this as a press down on the side of possibility, that can tip the scales in every startup’s favor. 

Place your bet.

Imagine it’s two years from now. 

You’re listening to the first minute of a podcast about your startup. What’s the story you want to hear yourself tell? 

Here’s ours:

“The ‘kid’ in KidVC isn’t just a cool name! We picked it because we knew what our purpose was: we were out to infuse curiosity, humanity, learning, hopefully even a bit of joy into startups and venture capital investing. 

Over the past couple of years, we’ve looked at hundreds of early-stage companies. And we ended up investing in tens of founders who had their own strong sense of purpose. Who were people-led in their approach. And who had what we call design-fed qualities–though they’d never say it that way. 

We were able to invest more than just money. It was blood sweat and tears. We helped brainstorm new strategies, construct scrappy prototypes, make big pivots, find better branding and marketing strategies, define and fully live a fulfilling work culture. 

Though we tried to be perfect, we know we haven’t been. But we’ve been successful, financially and beyond. The startups we’re working with are doing everything from standing up a whole new digital media landscape, to improving the health and nutrition of every baby on earth, to catalyzing the science that can rid the world of heart disease. 

We, KidVC, as best we could, lived our purpose. And we couldn’t be prouder of the startups we’re invested in–for living theirs too.

Before you go.

We’re curious: how do you want the story of your startup to begin? What ending do you have in mind? And knowing what you know now about why startups fail, what are you going to do differently to make sure yours doesn’t? 

When you’re ready to explore the answers to these questions, let us know.