If You’re Asking If You Can Start a Startup, We Know How Likely You Are to Fail — And It’s a Lot Worse Than the Average

This is one of those “I did the math” posts, and it might inspire you, but it could also discourage you so before I let you go on into the depths of discouragement, let me point out that what we’re exploring here is how to avoid failure — that, if the math prove that you’re odds are very slim, take that as direction as to your priority and focus (hint: find the partner with whom you can overcome that).

What prompted this was that I was asked by a founder, “Is it permissible under the law to establish a new startup…”

If you’re here wondering whether you’re allowed to start a startup — whether it’s permissible — the hard truth is that the odds of your success are not just low, they’re abysmal. Not average. Worse than average. And the math isn’t just sobering, it’s an ice bath of entrepreneurial reality.

We’ve all heard that 90% of startups fail. That statistic is now basically startup scripture quoted endlessly in pitch competitions, incubator intros, and every investor meeting ever. But while that’s a catchy average to toss around, averages are misleading. They hide the ugly truth behind a pleasant mathematical veneer: if you’re asking questions like “can I do this?”, the odds are much worse for you than that already horrific number.

The Math

By the way, I hate math, it’s not in my nature beyond basic calculations, with which I find, ironically, I tend to be above average. Beyond that, I just can’t grasp some of this, but it’s bouncind around in my brain that if 90% if the AVERAGE, what are the exceptions? The failure rate stat comes from credible research. According to data cited by Harvard Business School’s Shikhar Ghosh, as many as 75% of venture-backed startups fail, and the broader ecosystem often pushes that number up to 90%, depending on how you define “failure” (dead, pivoted beyond recognition, acquired for scrap). Forbes, CB Insights, and Failory have all echoed these numbers. It’s not new.

Now, here’s where it gets spicy.

A study from Oxford, co-authored with University of Technology Sydney (UTS) and the University of Melbourne, indicates that only about 8% of people have what can be reliably considered an entrepreneurial personality type. You know the type: relentlessly proactive, risk-tolerant, resourceful, often obsessive, typically allergic to authority — you could say, someone who doesn’t ask if something’s “permissible” before doing it. As The Startup Genome Project puts it, entrepreneurs are “driven by discovery,” not consensus.

What’s more, these entrepreneurial types are not just different; they are statistically more likely to succeed. According to the same body of research, entrepreneurs are 8x more likely to succeed in launching a viable company than those who are not.

The Real Odds and the Unexpected Consquences

If 90% of startups fail, that implies a 10% average success rate. But remember, that’s the blended average: a statistical soup made up of both true entrepreneurs and everyone else who just thought starting a business sounded fun after reading “The Lean Startup” or because the local startup hub said everyone should (with their *paid for* help of course).

Let’s assume the population of founders looks like this:

• 8% of people are entrepreneurs (we’ll call them Type E)
• 92% are not (Type NE)
• Type E founders are 8 times more likely to succeed than Type NE

So how do we model this?

Let’s denote the average probability of success for Type NE as x. That makes the probability of success for Type E = 8x.

Now, to calculate the overall average success rate:

(0.08 * 8x) + (0.92 * x) = 10%
(0.64x + 0.92x) = 10%
1.56x = 10%
x ? 6.41%

This means:

• Non-entrepreneurial types (92% of people) have about a 6.4% chance of success
• Entrepreneurs (8%) have a whopping 51.3% chance of success
  (because 8 × 6.4% = 51.3%)

And that is the limit of what my TI-85 Calculator brain knows how to do (and I’ll even admit that I question if I got that right — so feel free to correct me!)

Let that sink in. The entrepreneurial population has five times the odds of the average, and nearly ten times the odds of someone who isn’t. You’re not just less likely to succeed if you aren’t entrepreneurial. You’re practically doomed unless you find someone who is.

Put aside whether my math is correct, Martin O’Leary, whom I’ve come to love given his work through Uncharted, shared the other day, “In startups, you ask forgiveness. In big orgs, you schedule a meeting to discuss who might give permission… next quarter.” Ask yourself the question to which we all know the answer, which organization drives innovation?

What This Means for You, the Hesitant Founder

If you’re here asking if it’s okay to start something, the answer isn’t about legality. Unless you’re living under an authoritarian regime where business creation literally requires permission slips (and if that’s the case, you’ve got bigger issues), asking if you’re “allowed” reveals something deeper: you’re probably not wired for this.

Entrepreneurial people don’t pause at the door waiting for permission. They break the damn door down, replace it with a better one, and then charge admission. They move fast, test fast, fail fast, iterate faster. They don’t wait for the world to validate them, they validate themselves through action.

Seeking approval, reassurance, or external validation, signals that you’re not likely in the 8%. That’s not a sin. It just means you need to partner with someone who is.

As Steve Blank, the father of modern startup methodology, puts it:

A startup is not a smaller version of a big company. It’s a temporary organization in search of a repeatable, scalable business model.

And you don’t search by sitting around asking if you’re allowed to explore.

Oh! The actual consequence of realizing all this, is actually not the potential discouragement that you are more likely to fail, and it’s not praise and celebration of entrepreneurial people being, in some way, better. Being an entrepreneurial person comes at great cost, with such people suffering from estrangement from society, incessant objection, their work being questioned, being difficult to work with, and usually struggling financially. If you’re sitting there asking how you become an entrepreneur, stop! What you want to be asking of yourself is your strengths and weaknesses and overcoming those by working with people who complement you.

Start Asking Who Should with You

You don’t get to build a successful company through wishful thinking or by following someone else’s checklist. You are NOT going to be successful because some customers say so and affirm an opportunity. You need conviction, obsession, and the kind of unreasonable belief in a better way that makes other people uncomfortable. That’s what it takes. If that’s not you? That’s fine. That’s what co-founders are for.

The harshest irony is that the people most likely to succeed in startups are the ones least likely to ask questions like “can I?” They just do. Because their brains are wired not to tolerate mediocrity. Because they don’t respect barriers that only exist in imagination, or even in laws. Because they look at the status quo and say, “this is broken, and I’m going to fix it, even if society says I can’t.”

Statistically? If you ask, your odds of success are about 6.4%. Obviously, hopefully, you want to be working with the person for whom those odds are around 50%.

Start by being brutally honest with yourself about what you bring to the table. Are you the entrepreneur? Or do you need to find one?

Challenge yourself to understand why validation is something you do, not something you get.

Originally published at https://seobrien.com on April 9, 2025.