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Software startup · 14 min

Test demand before you build

The most expensive mistake in software is building something nobody pays for. You can find out in weeks, before you write the code, if you ask the right way and count only what people do.

Ticket 01 · The guess

Why did they shut down?

CB Insights, a research firm, studied venture-backed startups that shut down since 2023. What share of those whose reason it could find named poor product-market fit (the product never found enough people who wanted it) as a reason?

20%
0%100%
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

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Sources and every number (1)

Sources

  • The top 9 reasons startups fail (a research firm's analysis of 431 venture-backed companies that shut down since 2023, 385 with a reason it could identify; published March 5, 2026) · CB Insights, 2026

Every number

  • 43%cbinsights.com ·2026 · CB Insights, a research firm, in its 2026 analysis of venture-backed startups that shut down since 2023: the share of the companies whose reason it could identify that named this. Each company could name several reasons, so the shares add up to more than a hundred: poor product-market fit, the product never found enough buyers.
  • 70%cbinsights.com ·2026 · CB Insights, a research firm, in its 2026 analysis of venture-backed startups that shut down since 2023: the share of the companies whose reason it could identify that named this. Each company could name several reasons, so the shares add up to more than a hundred: ran out of capital.
  • 385cbinsights.com ·2026 · CB Insights, 2026: venture-backed startups that shut down since 2023 whose reason it could identify, out of all it studied.
  1. Lessons›
  2. Industries›
  3. Software startup
  • ·Before this: Paying for growth
  • ·Next: Setting up the company
  • ·Free guide: How software companies make money
Skip to the lesson
Back to the home page and map, from TryOwning · Software startup · Lesson 5
Part 1 of 3Part 1 of 3, 0 done

Software startup · 14 min

Test demand before you build

The most expensive mistake in software is building something nobody pays for. You can find out in weeks, before you write the code, if you ask the right way and count only what people do.

Ticket 01 · The guess

Why did they shut down?

CB Insights, a research firm, studied venture-backed startups that shut down since 2023. What share of those whose reason it could find named poor product-market fit (the product never found enough people who wanted it) as a reason?

20%
0%100%
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number (1)

Sources

  • The top 9 reasons startups fail (a research firm's analysis of 431 venture-backed companies that shut down since 2023, 385 with a reason it could identify; published March 5, 2026) · CB Insights, 2026

Every number

  • 43%cbinsights.com ·2026 · CB Insights, a research firm, in its 2026 analysis of venture-backed startups that shut down since 2023: the share of the companies whose reason it could identify that named this. Each company could name several reasons, so the shares add up to more than a hundred: poor product-market fit, the product never found enough buyers.
  • 70%cbinsights.com ·2026 · CB Insights, a research firm, in its 2026 analysis of venture-backed startups that shut down since 2023: the share of the companies whose reason it could identify that named this. Each company could name several reasons, so the shares add up to more than a hundred: ran out of capital.
  • 385cbinsights.com ·2026 · CB Insights, 2026: venture-backed startups that shut down since 2023 whose reason it could identify, out of all it studied.
  1. Lessons›
  2. Industries›
  3. Software startup
  • ·Before this: Paying for growth
  • ·Next: Setting up the company
  • ·Free guide: How software companies make money