Understanding the Dynamics of Startup Success: A Systematic Literature Review

A startup is essentially a newly established business or one in its foundational stage, with its primary aim being the monetisation of an innovative idea. According to a report by CBI Insights, globally there are over 150 million startups, with an astounding figure of 50 million new startups launching each year. This means that, on average, approximately 137,000 startups are founded every single day. However, a staggering 90% of these startups fail, while only a small fraction, about 10%, manage to survive and sustain themselves over time. Among these, a mere 1% rise to the unicorn status. Furthermore, developing countries such as Malaysia need to develop their startup ecosystems to drive economic growth via the entrepreneurship agenda. Thus, it is important to understand the factors affecting the outcome of the startup process. Practitioners and policymakers need to better understand the factors influencing either the success or failure of ventures. This paper explores the factors contributing to startup success or failure as suggested by researchers over the past decade. Via a Systematic Literature Review (SLR) of scholarly works using the Lens.org database, the key factors influencing startup outcomes are extracted. The themes are further discussed according to the two crucial phases; pre-launch and post-launch. Pre-launch challenges include inadequate solution validation, lack of demand forecasting, stress testing and premature launches. Post-launch hurdles encompass inconsistency in innovation, disregarding customer feedback, failure to pivot and pressure to scale rapidly. By categorizing these factors and examining their interdependencies, the research provides a structured framework for understanding startup outcomes. It aims to offer practical insights for entrepreneurs, investors, and policymakers to mitigate the risks associated with startup ventures.