Key factors behind traditional, digital and hybrid startup failures in Irbid, Jordan: financial instability and entrepreneurial skill gaps

Purpose This study explores the main factors behind the failure of traditional, digital, and hybrid startups in Irbid, Jordan, focusing on financial instability and entrepreneurial skill gaps. The research aims to understand the challenges faced by local entrepreneurs and provide actionable recommendations to improve startup sustainability. Design/methodology/approach A qualitative study using in-depth interviews with 18 Irbid entrepreneurs employed purposive sampling and NVivo 14-assisted thematic analysis to identify key failure factors, including financial instability and skill gaps. Findings Financial instability, including poor liquidity management and lack of financial planning, is a major factor across all startup types. Traditional businesses face significant cash flow challenges; digital startups struggle with technological adaptation, and hybrid businesses find it difficult to manage traditional and digital models. Furthermore, gaps in essential entrepreneurial skills—especially in financial literacy, marketing, and technology—influence business outcomes significantly. Practical implications The findings guide policymakers, educators, financial institutions, and entrepreneurs. Targeted capacity-building programs in financial management, digital integration, and strategic planning can help prevent failure. Microfinance schemes, mentorship networks, and curriculum reforms prioritising practical entrepreneurial skills are essential to enhance micro-enterprises sustainability in Irbid and similar developing contexts. Originality/value By integrating RBV and EO, this research provides a novel theoretical lens to understand why startups fail in emerging economies. It offers practical contributions by highlighting the need for targeted interventions, such as capacity-building programs to improve entrepreneurs’ financial and strategic capabilities, ultimately supporting long-term startup viability in Jordan and similar contexts.