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Why Do Businesses Fail?

Published

6 years ago

on

Why Do Businesses Fail?

Why Do Businesses Fail?

For any new entrepreneur, it’s natural to be optimistic.

Whether that person has a world-changing idea or is starting a new coffee shop, the glass has to be half full that the business will succeed. Otherwise, what is the point of starting a new company in the first place?

The Harsh Reality

Today’s infographic from InsuranceQuotes shows that this entrepreneurial enthusiasm might be misplaced.

The reality is that it’s a cruel world out there for entrepreneurs. The Bureau of Labor Statistics in the United States keeps a sobering tally of how often businesses fail, and here are the numbers from 1995-2015:

Years in BusinessFailure Rate
1 year21.2%
2 years32.1%
5 years51.2%
10 years66.6%
20 years79.6%

Statistically speaking, there is over a 50% chance that any new business is toast in five years.

And the record for tech startups? It’s even worse, with 90% of all startups eventually failing.

Business Failure Can Be Complex

It takes the confluence of many factors to build a successful business: assembling the right team at the right time, achieving product/market fit, staying on top of the competition, and getting the necessary funding are just some of the key elements to success.

In the same vein, it is often hard to pin down just one reason for failure, since everything is so interconnected.

For example, one study by U.S. Bank shows that 82% of small businesses fail because of cash flow mismanagement. This is a fair point, since without cash flow there is no business.

However, while cash flow may end up being the final nail in the coffin for many businesses, it’s also fair to say that a lack of cash flow can be the symptom of other problems. What if the company is going after the wrong market? What if the team is dysfunctional and unmotivated? What if the company isn’t differentiated enough to compete?

With any of these situations playing out, it should be no surprise that sales aren’t coming in like expected, which would certainly tank cash flow. At the same time, a company with the right team and product should be able to make swift changes to right the ship from any chronic issues.

Some Reasons Businesses Fail

With the complexity of business failure in mind, here are some of the commonly listed reasons for why businesses fail:

  • 82% experience cash flow problems
  • 42% find that there is an insufficient need for their product or service
  • 29% run out of cash
  • 23% do not have the right team
  • 19% are out-competed

Lastly, for a full list of reasons for why businesses fail, see this infographic showing 20 common reasons why startups fail.

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Technology

Which Companies Own the Most Satellites?

Despite Starlink’s dominance in the industry, the company is set to face intense competition in the coming years.

Published

2 days ago

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September 23, 2023

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Who-Owns-the-Most-Satellites

Which Companies Own the Most Satellites?

Nearly 7,000 satellites orbit the Earth, serving vital functions such as communication, navigation, and scientific research.

In 2022 alone, more than 150 launches took place, sending new instruments into space, with many more expected over the next decade.

But who owns these objects? In this graphic, we utilize data from the Union of Concerned Scientists to highlight the leaders in satellite technology.

SpaceX’s Dominance in Space

SpaceX, led by Elon Musk, is unquestionably the industry leader, currently operating the largest fleet of satellites in orbit—about 50% of the global total.

The company has already completed 62 missions this year, surpassing any other company or nation, and operates thousands of internet-beaming Starlink spacecraft that provide global internet connectivity.

Starlink customers receive a small satellite dish that self-orients itself to align with Starlink’s low-Earth-orbit satellites.

OwnerTotalShareCountry
SpaceX3,39550%USA
OneWeb Satellites5027%UK
Chinese Government 3695%China
U.S. Government3064%USA
Planet Labs, Inc.1953%USA
Russian Federation1372%Russia
Spire Global Inc.1272%USA
Swarm Technologies841%USA
Iridium Communications, Inc.751%USA
Other1,52823%

Percentages may not add to 100 due to rounding.

In second place is a lesser-known company, British OneWeb Satellites. The company, headquartered in London, counts the UK government among its investors and provides high-speed internet services to governments, businesses, and communities.

Like many other satellite operators, OneWeb relies on SpaceX to launch its satellites.

Despite Starlink’s dominance in the industry, the company is set to face intense competition in the coming years. Amazon’s Project Kuiper plans to deploy 3,236 satellites by 2029 to compete with SpaceX’s network. The first of the fleet could launch as early as 2024.

The Rise of China’s Space Program

After the top private companies, governments also own a significant portion of satellites orbiting the Earth. The U.S. remains the leader in total satellites, when adding those owned by both companies and government agencies together.

American expenditures on space programs reached $62 billion in 2022, five times more than the second one, China.

China, however, has sped up its space program over the last 20 years and currently has the highest number of satellites in orbit belonging directly to government agencies. Most of these are used for Earth observation, communications, defense, and technology development.

Satellite Demand to Rise Over the Decade

Despite the internet being taken for granted in major metropolitan areas and developed countries, one out of every three people worldwide has never used the web.

Furthermore, the increasing demand for data and the emergence of new, more cost-effective satellite technologies are expected to present significant opportunities for private space companies.

In this context, satellite demand is projected to quadruple over the next decade.

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