A much older friend of mine, who passed away 15 years ago, had throughout his life started 5 small businesses. He noted the biggest mistake he saw entrepreneurs make was failure to give the startup enough time. What he meant, he said, was that it takes at least up to 5 years to get most businesses to a sustainable position – and too many entrepreneurs gave up before year 5 – because they did not have sufficient funds to keep the business functioning that long until it achieved success.

The business news media is filled with aspirational stories about, often, a person in their 20s who “risked it all” to start up a business, and today, say 10 years later, the business is worth hundreds of millions of dollars.

These are feel good stories and many of us like reading about their success – and may start to think we too should do what they did.

But the reality is these stories are exceptions – about 90% of business startups will fail.

The media’s selective focus on successful businesses skews our view of the real-world situation.

(This post was written with assistance from Microsoft Copilot AI whose output has been edited and added to, by me.)

How Many Startups Fail?

⭐ Up to 90% of startups fail

• “According to the latest data, up to 90% of startups fail.”

⭐ 10% fail in the first year

• “Across almost all industries, the average failure rate for year one is 10%.”

⭐ 70% fail between years 2 and 5

• “In years two through five, a staggering 70% of new businesses will fail.”

⭐ First‑time founders succeed only 18% of the time

• “First‑time startup founders have a success rate of 18%.”

⭐ Other sources confirm the same pattern

• “With over 90% of startups not making it past their first few years…”
• “90% of global startups fail at some point in their lifecycle.”

What does “success” mean?

Most datasets define “failure” as:

• shutting down
• being acquired for less than invested capital
• never reaching profitability
• running out of cash
• failing to scale

“Success” usually means:

• reaching sustainable profitability
• being acquired for a positive return
• going public
• or reaching meaningful scale

By those definitions, success is extremely rare.

The media only shows winners

Business media amplifies survivorship bias.

1. Success stories are more clickable

People want inspiration, not cautionary tales.

2. Failed founders rarely want to talk publicly

Shame, NDAs, and financial trauma keep failure stories quiet.

3. Media outlets rely on PR pipelines

PR firms pitch success stories, not failures.

4. The “American Dream” narrative rewards outliers

Stories of extreme upward mobility fit cultural expectations.

5. Advertisers prefer optimism

Media economics reward stories that encourage entrepreneurship, consumption, and risk‑taking.

The result is a massive distortion: The public sees the 1–10% who succeed, not the 90% who don’t.

The Bias

The media’s portrayal of entrepreneurship is like reporting only on lottery winners:

• “This person bought a ticket and won $50 million!”
• But never do we see – “Here are the 200 million people who bought tickets and lost.”

The data shows that starting a business is one of the riskiest financial decisions a person can make, yet the narrative frames it as a common path to wealth.

Summary

• Roughly 90% of startups fail.
• Only about 10% survive long‑term.
• Only a tiny fraction become “success stories” the media celebrates.