Do 90% of Startups Fail? Maybe, but That’s Not the Real Story

By Zsolt Feher, Vice President of Business Development at Hogan Assessments

(small.news) — When people mention that 90% of startups fail, they often do so with dramatic certainty. It can sound like a warning label on entrepreneurship: dangerous, irrational, even foolish.

After years of working with entrepreneurs, leaders, and small business owners through JCI (Junior Chamber International) and consulting at Hogan Assessments, I learned that the main issue isn’t whether 90% fail, but how we define failure and success for entrepreneurs.

Is a bakery that never becomes a national chain a failure? Is a family-owned service company that has employed six people for twenty years a failure because it never raised venture capital? Is a young entrepreneur who closes one business, learns discipline, builds a network, and starts again three years later a failure?

The Businesses that Don’t Make Headlines

In Central Europe, the small business landscape isn’t made of unicorn stories. It’s made of people who open the shop early, answer emails late, pay suppliers before themselves, and shoulder their families’, employees’, and communities’ emotional burdens. Their stories rarely appear in startup reports, yet they are the foundation of the economy.

I’ve seen this in Hungary and across Europe. A young business owner arrives at a JCI event with a business card, a nervous smile, and a half-formed dream. She may not know how to price her service. He may not understand cash flow. They may believe passion is enough until reality sets in. Customers don’t buy quickly. The first employee is hard to manage. Suddenly, entrepreneurship is no longer a pitch deck. It tests character.

This is where many businesses break. But it is also where many small business owners are born.

What JCI Taught Me is that Business School Doesn’t

Through JCI, I saw entrepreneurship not just as business but as leadership. JCI was a school of responsibility. We ran projects with limited funding, motivated volunteers who could leave at any time, negotiated with cities and companies, and turned ideas into action. That’s much like what small business owners do daily.

One of the most important lessons from that experience: entrepreneurship is rarely solo. The heroic founder myth is attractive but incomplete. Behind every successful small business is a network of mentors, customers, peers, accountants, family, chambers, community groups, and sometimes just one person urging you to keep going, but change how you do it.

What We Celebrate and What We Forget to Teach

We encourage young people to be entrepreneurial, but often do not provide them with the tools needed to endure the challenges of entrepreneurship.

We celebrate innovation but neglect sales. We admire courage but overlook pricing. We praise independence but forget that first-time founders need structure. We encourage dreaming big, but small and medium-sized businesses often need more practical support: financial literacy, leadership habits, hiring decisions, peer networks, and trusted advice.

Small and medium-sized entrepreneurs don’t usually fail because they lack ideas. They fail or underperform because execution is harder than imagination. A restaurant owner may know food but not delegation. A consultant may know the profession but not marketing. A startup founder may understand the product but not the team’s psychology. And almost every founder, at some point, discovers that leading a business means leading people.

The Four Stages Nobody Warns You About

In many communities, I see the same pattern. The first stage of entrepreneurship is about courage. The second is about discipline. The third is about people. The fourth is about letting go.

The small business owner who cannot let go of every decision becomes the bottleneck. The founder who refuses to professionalize becomes the risk. The entrepreneur who built the company through instinct must eventually learn the process. And growth is not always about doing more; sometimes it means doing less, but doing it through others.

A five-person company can survive on the founder’s energy. A fifty-person company cannot.

What Success Actually Looks Like

So, do 90% of startups fail?

Maybe the number is useful as a provocation. It reminds us that markets are selective, customers are demanding, and enthusiasm is not a business model. However, focusing on this statistic misses the main argument: entrepreneurship should be measured by the growth, learning, and resilience it fosters, rather than a simple success-or-failure rate.

This is what small business owners know best. Success is not always a headline. Sometimes, it is paying salaries on time. Sometimes, it is surviving a crisis with your values intact. Sometimes, it is closing a company honestly, then starting again, wiser. Sometimes, building something modest gives a family dignity and a neighborhood usefulness.

The Real Work Belongs to All of Us.

If we want stronger economies, we can’t just celebrate winners. We must build ecosystems that allow more people to learn before losing too much. That means mentoring, practical education, honest talks, local networks, and leadership growth. It also means creating spaces where entrepreneurs can admit uncertainty without shame.

Failure is when no learning remains. Failure is when communities leave entrepreneurs alone. Failure is when we reduce human courage to a percentage.

A business may close, but the entrepreneur may continue. A project may fail, but a network may remain. A startup may disappear, but the skills, confidence, and relationships built through the journey may become the foundation of something better.

So instead of asking only whether 90% of startups fail, let’s ask a better question:
How do we help more entrepreneurs become stronger before the market tests them?

That is the real work of supporting entrepreneurs. Success in entrepreneurship is not defined only by survival or scaling up, but by developing stronger, more resilient individuals and communities. This responsibility belongs not only to founders, but to all of us who care about small businesses, local communities, and the future of work.

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