The biggest reason startups fail is because of no market need. Emilija Manevska/Getty Images

It's a brave new world. It's an era of hot IPO's, next-generation technological disruptions, Silicon Valley tech-storms, and many startups that eventually nosedive. Many startups believe that they are creating the next best thing, but in reality, more than 80 percent of the startups fail on a global scale.

These are staggering numbers as the world is evolving, and the job market is saturating exponentially, giving to the rise of startups and entrepreneurial ventures. Nowadays, it's easy to get caught up in the endless stories of startup successes, but in actuality, startup failures are way more common that startup successes in accord with data from CB Insights.

According to the surveys by CB Insights analysts and researchers, more than 70 percent of upstart tech companies fail, and their counterparts the 'consumer hardware startups' are prone to failure with 97 percent ultimately dying or becoming "zombies." Let's talk about why startups and businesses fail. One of the significant factors that cause startups to fail miserably is that there's no market need.

Preventing 'expert syndrome'

Startups can run into the problem of their being little or no market need for the product or service they are providing. Startup founders tend to overrate and overestimate themselves and underrate the more experienced people around them. This is known as 'expert syndrome,' and it is one of the contributing reasons why many startups tend to fail and nosedive.

Ignorant individuals are often bursting with escapism, unrealistic expectations and grandeur emotions, which may cause their businesses to fall out. The actual feeling that you are in control combined with an idealistic inevitability that there is market need for the creator's product or service can lead to inevitable failure.

Expert syndrome is recognized in the field of psychology as the Dunning-Kruger effect; cognitive bias of superiority in the mind of an individual that believes their knowledge is greater than it is. This can also result in unrealistic expectations for otherwise relatively small impact incremental innovations.

As an MBA, I have seen this in myself over the years (admittedly often in hindsight) and in waves of fresh MBAs trying to turn their class project business plan into a real business. However, it is not exclusive to MBAs as any domain experts' true knowledge could be limited by their perspective and experience of a given situation. On the contrary, the secondary issue of the nature of innovation is more complicated as it presents a cause and effect relationship with the market scenario.

For a startup's success, it is essential for the product or service to be more 'disruptive' in nature rather than being merely incremental. The startup needs to solve an unsolved problem rather than assisting the problem.

Lessons learned

Now, the million-dollar question is how to learn from 'No Market Need' as the leading startup reason for failure. My advice is to get out and speak early and often with those with a different perspective on the innovation, certainly outside of the area of the innovator. From my experience this is better done in waves in that the questions are asked to the relevant persons, first reaching out to those most proximate to but outside the invention and inception space. After that moving further out from the center to find reason, logic, and ideas for validation of the disruption that can support the startup momentously.

For example, the technology for Solenic Medical addresses infections on medical implants, which was invented by a pair of university researchers at UT Southwestern. The first is an expert in infectious diseases and the second is a thermal medicine engineer.

In my due diligence research, I first reached out to orthopedic surgeons who perform the implant surgeries and deal with the first challenges of infections that arise. Receiving great feedback, almost too good to be true at first pass, I moved on to a next wave of doctors a little further out. I spoke to an ER doctor, a neurosurgeon, an interventional radiologist, and so forth, which didn't result in the same level of enthusiasm but raised good questions that drove further investigation in the due diligence effort.

From there I moved on to contacts in surgical centers and medical billing experts, further removed from the problem and again less enthusiastic. Less enthusiastic for sure, but none of them raised significant barriers, and some helped refine our understanding of what it would take to get the product to market within facility budgets and medical reimbursement requirements.

The crux here was not in any way to disrespect or discredit the inventor of the invention, but to get a perspective that complements the inventor(s) and validate the technology in multiple dimensions: the customer perspective, the product enabled by the technology, team requirements, funding challenges, all leading to valuable insights on the value of the innovation itself.


Obviously in the case of Solenic Medical, we chose to license that technology and form a company around it because we became confident that there was significant market need worth the challenges of bringing the medical device to market. This is what 'Market Need' is all about. It's about finding the right need at the right time and in the right manner.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

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CultureMap Emails are Awesome

Houston startups raise funding, secure partnerships across space, health, and sports tech

short stories

It's been a new month and a few Houston startup wrapped up November with news you may have missed.

In this roundup of short stories within Houston startups and tech, three Houston startups across health care, space, and sports tech have some news they announced recently.

Houston digital health company launches new collaboration

Koda Health has a new partner. Image via kodahealthcare.com

Houston-based Koda Health announced a new partnership with data analytics company, CareJourney.

"This collaboration will aim to develop benchmarking data for advance care planning and end-of-life metrics," the company wrote on LinkedIn. "Koda will provide clinical and practice-based expertise to guide the construction of toolkits, dashboards, and benchmarks that improve ACP programs and end-of-life outcomes."

Koda Health announced the partnership in November..

“Beyond the checkbox of a billing code or completed advance directive, it’s important to build and measure a process that promotes thoughtful planning among patients, their care team, and their loved ones,” says Desh Mohan, MD, Koda's chief medical officer, in the post.

CareJourney was founded in 2014 in Arlington, Virginia.

"I'm hopeful next-generation quality measures will honor the patient’s voice in defining what it means to deliver high quality care, and our commitment is to measure progress on that important endeavor," noted Aneesh Chopra, CareJourney's co-founder and president.

Sports tech startup raises $500,000 pre-seed investment

BeONE Sports has created a technology to enhance athletic training. Photo via beonesports.com

Houston-founded BeONE Sports, an athlete training technology company, announced last month that it closed an oversubscribed round of pre-seed funding. The company announced the raise on its social media pages that the round included $500,000 invested.

Earlier in November, BeONE Sports completed its participation in CodeLaunch DFW 2022. The company was one of six finalists in the program, which concluded with a pitch event on November 16.

Space tech company snags government contracts

Graphic via cognitive space.com

The U.S. Air Force has extended Houston-based Cognitive Space’s contract under a new TACFI, Tactical Funding Increase, award. According to the release, the contract "builds on Cognitive Space’s work to develop a tailored version of CNTIENT for AFRL to achieve ultimate responsiveness and optimized dynamic satellite scheduling via a cloud-based API.

The $1.2 million award follows a $1.5 million U.S. Air Force Small Business Innovation Research award that the company won in 2020 to integrate CNTIENT with commercial ground station providers in support of AFRL’s Hybrid Architecture Demonstration program.

“The TACFI award allows Cognitive Space to continue supporting AFRL’s vitally important HAD program to help deliver commercial space data to the warfighter,” says Guy de Carufel, the company’s founder and CEO, in the releasee. “CNTIENT’s tailored analytics platform will enable HAD and the GLUE platform to integrate modern statistical approaches to optimize mission planning, data collection, and latency estimation.”

Houston airport powers up new gaming lounge for bored and weary travelers

game on and wheels down

Local gamers now have a new option to while away those flight delays and passenger pickup waits at Hobby Airport.

Houston's William P. Hobby Airport is now one the first airports in the country to offer what's dubbed as the "ultimate gaming experience for travelers." The airport has launched a premium video game lounge inside the international terminal called Gameway.

That means weary, bored, or early travelers can chill in the lounge and plug into15 top-of-the-line, luxury gaming stations: six Xbox stations, five Playstation stations, four PC stations, all with the newest games on each platform. Aficionados will surely appreciate the Razer's Iskur Gaming Chairs and Kraken Headsets, along with dedicated high speed internet at each PC station.

The Gameway lounge pays homage to gaming characters, with wall accents that hark to motherboard circuits Crucial for any real gamer: plenty of sweet and savory snacks are available for purchase to fuel up on those fantasy, battle, or sporting endeavors. As for the gaming console stations, players can expect high definition screens, comfortable seating, and plenty of space for belongings.

Make video games a part of your pre-flight ritual. Photo courtesy of Gameway

This gaming addition comes just in time for the holiday rush, when travelers can expect long lines, delays, and are already planning for extended time for trips. As CultureMap previously reported, Hobby will see a big boost in travelers this season — the largest since 2019. Now, those on a long journey can plug in, decompress, and venture on virtual journeys of their own.

Texan travelers may be familiar with Gameway; the company opened its first two locations at Dallas Fort-Worth Airport. The buzzy lounge an industry wave of acclaim: Gameway was awarded Best Traveler Amenity in 2019 at the ACI-NA Awards and in 2020, voted “Most Innovative Customer Experience” at the Airport Experience Traveler Awards, per press materials.

Two new locations followed in 2021: LAX Terminal 6 and Charlotte Douglas International Airport. The first of Gameway's Ultra lounge brand opened in September at Delta's Terminal 3 in LAX.

Gaming culture is a way of life in the Bayou City , which hosts Comicpalooza, the largest pop culture festival in Texas, and is home to several e-sports teams, including the pro esports squad, the Houston Outlaws.

A delayed flight never seemed so ideal for gamers flying out of Hobby. Photo courtesy of Gameway

“Gameway is the real reason to get to the airport early,” said Co-Founder Jordan Walbridge in a statement. “Our mission is to upgrade the typical wait-at-the-gate experience with a new stimulating, entertaining option for travelers of all ages.”

Here's guessing Hobby might just see an increase in missed or late flight arrivals — as travelers simply must beat those big bosses, solve puzzles, or win sports matches in the lounge.

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This article originally ran on CultureMap.