90% of the companies on TechCrunch disappear within 6 months | Hacker News Reader

90% of the companies on TechCrunch disappear within 6 months

simply.io

31 pointsjohnx123-up23 comments

exactly how good is TechCrunch at predicting a company’s success?

TC's job isn't to predict a startup's success anymore than the NYTimes' job is to predict who our next President will be. It's a news outlet whose aim is to publish facts and report the pertinent tech startup news of the day.

Now if you want to argue about whether what TC writes about is pertinent or not, that's a different discussion entirely.

I half agree.

The N.Y.Times should be more about helping its readers decide who should be the next President than telling them who will be the next President. But they'd be falling down on the job if they weren't making it clear that, say, Newt Gingrich's chances of being elected President this November are very low.

Similarly, part of TC's reporting should be whether a particular company's business model is working, whether they're running out of money, whether they're gaining customers, that sort of thing. But the link seems to equate any mention of a company by TC as a prediction that it will succeed. Not the same thing.

> Now if you want to argue about whether what TC writes about is pertinent or not, that's a different discussion entirely.

This I agree with entirely.

This is the difference between an editorial and a news report. The NYT has both. TC also has both.

You're right, it's not. It's just something I'm curious about considering how much PR TC companies get.

From your own comment on the post: Frankly, I doubt TechCrunch would post their success rate online. We can only make educated guesses.

Your comment insinuating that they would care about their "success rate" seems to indicate that you think otherwise?

Jesus Christ, this is not even close to being true and a paltry 5 minutes of research could have confirmed it. Starting from: http://techcrunch.com/page/311/, looking at stories from September 29th, we have:

  SocialBakers: Still around
  SweetLabs: Still around
  Networked Insights: Still around
  Hipmunk: Still around
  Fameron: Still around
  Vostu: Still around
  Storydesk: Still around
  Shazam: Still around
  Kred: Still around
  TechCompanyPay: Still around
  GetComparisons: Still around

In short, this article isn't just wrong, it's dangerously wrong. 100% of the startups in this sample still exist.

I do think the 90% figure comes with a bit of hyperbole, but I also think there are more startups that “fail” than people realize. Most of these companies have such a low maintenance cost that the service continues even after the founders called it quits a long time ago. I personally know one of these companies.

By the way, the point of the article wasn't really about the 90% figure, but more about how people are seeing an article on TechCrunch as a means to an end, rather than a beginning.

So, you literally went back EXACTLY 6 months, right? Well, natural language writing is not code. It has this things called "figures of speech".

The title means: "hellofalot of TC companies don't go anywhere and/or close quit soon after featured".

So, try 1 year and adjust the scale to > 70%. How will that go?

Also the "disappear" thing -- take it to mean, "are in dire situation, while the may still keep up a website and make desperate attempts for VC".

If he were within an order of magnitude of being correct, then we could nitpick about methodology but he's not. Even with his revised interpretation he is wrong, just plain wrong.

Isn't that "90%" figure pretty commonly bandied around about startups in general?

Seems to me this is pretty much saying TechCrunch just covers a random sampling of startups, and provides zero benefit to the ones it covers. (A more cynical view might be that if it's true that TechCrunch provides some benefit for some of the companies it covers, it must provide _negative_ benefit for the rest to maintain it's same-as-random-sample average…)

Given that both 90% figures are just rough general estimates without looking at the data (that is to say "made up") you can't really compare them.

Even if they where both data backed statistics you could imagine that maybe TechCrunch tends to cover preferentially the more interesting and exciting shoot for the moon types of things over the more boring "we're making money now" types which would skew their results.

I don't actually read TechCrunch so of course I have no idea and that's just speculation based on nothing.

There's no way this is true. I agree with the point the OP is trying to make, but inventing stats isn't a good way to make a point (although it's probably a great way to get people to click through to the article).

Well, do YOU have stats to prove they are inventing stats ? ;)

In my next blog post, I plan on making up some numbers which strongly disagree with this 90%/6 month figure. That counts as proof, right?

Lol. There is no concrete stat, one can only make educated guesses, and 90% is mine.

Wow, really, you are making educated guesses on statistics as precise as 90%? The headline is clearly linkbait (unless you provide data).

In fact, I wouldn't even have been comfortable with "Majority of startups on TC die within 6 months". There is simply no data cited.

Is there any data to back this up?

I got this from a Dreamit Venture graduate, so I'm assuming they have a general idea just based on keeping in contact with other founders.

Also, this number (90%) seems to be the general consensus online.

I like your core point. If you aren’t building something of value, then the press doesn’t matter you won’t last anyway.

But the “90% of Techcrunch companies are gone in 6 months” stat is just wrong. I don’t know who this Dreamit guy is, but seems to have no bearing on the reality of an average Techcrunch post.

Namely, most of the Techcrunch announcements nowadays are AFTER some amount of angel money has been raised. And most companies target around 18 months of cash. So even if they were building something horribly crappy, there’s no way they are gone in 6 months.

Looking at page 1 of Techcrunch today, and filtering just for early stage startups. We have: Worlddesk, Snapguide ($2m), Kibits ($1m), Circl.es, Hootsuite ($20m), Skills.to ($3m), RentSocial. While you can go through $1-3m quickly if you spend badly, six months is unrealistic.

As others are saying.. this is just a dumb, wrong stat.

[citation needed]

If 90% is even close to the true figure then it suggests there is a new line of approach for a start-up. Monitor TechCrunch and analyse each of the featured business ideas. Where an effective business model can be worked out then run a parallel start-up - chances are high that the fast follower with a clear revenue stream will pass the originator as they crash and burn.

Thought tech crunch was primarily a PR venue. Advertising and marketing costs a lot, if you are a fledgling company with a difficult revenue stream or unclear market position I'd imagine you see a lot of wasted $$$ leading to the end of life scenario.

thanks for posting!

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