Why do startups fail?

Hey, everyone. I am Hajj, partner at Y Combinator. I'm gonna answer the question of why do startups fail. So I'll work backwards to answer this one. Startups fail because the founders give up and stop working on them, and founders give up because they run out of money or energy or both.

And they run out of these things because either they had no users or they didn't have enough users to convince investors all themselves, that the startup deserves more money or effort to keep it alive. So the reason they have no users is because as YC's motto goes, they did not build something people want.

And there are multiple ways to not build something people want, but the most common I've seen is to not talk to your users and build something you think they want but that they don't actually want. And there are two common flavors of this.

The first is more common with technical founders where instead of talking to users, they just keep rewriting their code to make it prettier and more elegant and faster. And this is a trap because users don't care how amazing your code is. All they care is if your product solves a real problem for them or not.

Creative and ideas y founders can tend to kinda use the Steve Jobs argument to avoid talking to their users, which is that Steve Jobs was a visionary, and he didn't believe in talking to his users. So why should I talk to my users? I'll kind of just intuit everything I need to build. And the reason that's a bad idea is, one, you're probably not Steve Jobs.

But even if you were, I think that advice is not actually what he did. Steve Jobs spent his entire life thinking deeply about the ways that consumers interact with technology and products, and he was building products for consumers.

So the actual lesson to take from there is you should spend a lot of time talking to your users, watching them, observing them, and learning what kinds of products they want you to build. As a startup founder, you're a doctor, and the users are your patients.

So you should always go and talk to your patients and listen to what they say their symptoms are and what they're complaining about, but you will let them prescribe their own medicines. That's your job. So make sure you talk to your users, build things that people actually want, and you'll avoid the most common way that startups fail.