99% of Tech Startups Never Hit $1 Million in Revenue

According to the book Scaling Up, 94% of companies — all types of companies, not just tech startups — never hit $1 million in revenue in a calendar year, ever. We’ve all heard the stat that most entrepreneurs fail within five years, but there’s a big difference between not failing and not building a seven figure+ revenue business. So, if 94% of all companies never hit $1 million in revenue, it’s safe to say that 99% of tech startups will never hit $1 million in revenue as tech startups are 10x harder than regular businesses (see the difference between innovative and replicative businesses).

As an entrepreneur building a tech startup, here are a few things to think about:

Knowing that 99% of tech startups never hit $1 million in revenue makes success look even more daunting. The key is to continually learn and improve as fast as possible.

What else? What are some more thoughts on the idea that 99% of tech startups never hit $1 million in revenue?

4 thoughts on “99% of Tech Startups Never Hit $1 Million in Revenue

  1. I wonder how many of those entrepreneurs actually tried to go after a market where they could actually make $1Million per year. I bet 90% of entrepreneurs do not do market sizing work before hand to actually have a chance of it.

    I bet if the sample was based upon how many people went after a million dollar market based upon research and succeeded, the number of people who hit $1MM per year would be higher than 6%.

    Also most traditional brick and mortar businesses require a lot more upfront capital, so testing out multiple traditional businesses within one year, probably is not possible. But within 3 months or so, most tech entrepreneurs should be able to tell whether there is demand and a large market for their product. Allowing for the opportunity to test up to 4 different companies within a year.

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