Are Startup Failure Rates as Bad as They Used to Be?

Are Startup Failure Rates as Bad as They Used to Be?

The chances of your business surviving past the five-year mark are somewhat better than they used to be, says one economics expert.

Are Startup Failure Rates as Bad as They Used to Be? Dr. Scott Shane Weighs InAccording to research and commentary from Dr. Scott Shane, professor of economics and entrepreneurial studies at Case Western Reserve University (and long-time SBT contributor), startup failure rates have declined slightly for employer firms in recent years.

“In 2010, the odds that a business would fail were lower than in 1980,” Shane confirmed in an email to Small Business Trends,.

Shane stated that three factors govern a small business’s survival rate: age, size and industry, in that order.

“Failure rates drop dramatically as firms age,” Shane said. “This is true across all sectors of the economy, all geographic locations and all time periods.”

As to business longevity, size matters, he said. The bigger the company, the less likely it is to fail.

Finally, industry plays a significant role. Data from Shane’s reports (see below) testify that sectors such as education, healthcare, mining and manufacturing fare better than others — information technology and construction, in particular.

Small Business Survival Report Summaries

The following seven reports, the first by Small Business Trends CEO and publisher Anita Campbell, the next six by Shane all published over an 11-year period, dating from July 2005 to January 2016 paint a more complete picture of the situation. But Campbell’s initial report deals with at what age most small businesses fail.

July 2005: Business Failure Rates Highest in First Two Years

Data from the U.S. Bureau of Labor Statistics revealed that most businesses that fail do so within the first two years.

“Across sectors, 66 percent of new establishments were still in existence two years after their birth, and 44 percent were still in existence four years after,” the Bureau’s statistics showed (PDF).

These findings square with Shane’s reports, which follow — survival rates vary by industry. In this case, the education and health services sector showed the highest survival rate while the information technology sector had the lowest.

It should be noted that the report covered the period from March of 1998 to March of 2002 — the height of the dot-com boom.

April 2008: Startup Failure Rates — The REAL Numbers

In his inaugural report, which used Bureau of the Census data produced for the Office of Advocacy of the U.S. Small Business Administration from 1992 to 2002, Shane found that the survival rate for startups dropped precipitously the first year (25 percent) and then fell another 11 percent the second year. Even though it began to level off after that, each year showed further decline. After ten years, only 29 percent of businesses remained.

Shane alluded to the fact that there are “considerable differences” across industry sectors in business failure rates but did not elaborate, saying that he would do so in a later article.

May 2008: Startup Failure Rates Vary — Choosing the Right Industry Matters

Shane followed up his initial report a month later sharing data from an article by Amy Knaup in Monthly Labor Review, published by the Bureau of Labor Statisics, which looked at the 1998 cohort of new businesses.

As Shane suggested in his first report, survival rates varied based on industry. For example, the four-year survival rate in the information sector was only 38 percent while survival rate for startups in the education and health services sectors were 55 percent. (Those are the same industries that Campbell found in her report as being at the bottom and top of the scale.)

“[T]he average start-up in education and health sector is 50 percent more likely than the average start-up in the information industry to live four years,” Shane said.

He added that the industries that have lower initial survival rates tend to continue with those rates every year.

May 2012: Businesses Face High Rates of Infant Mortality

After a several year hiatus, Shane returned in May of 2012 with another report. This time, he used data from the Bureau of Labor Statistics 1994 cohort, which showed the percentage of businesses alive in a given year that failed during the subsequent year.

Shane found, for example, that the proportion of businesses started in 1994 that failed in 1995 was 20.2 percent while the percentage of those still alive in 2010 but which failed by 2011 was a mere 4.3 percent.

Shane also found that the new business failure rate for companies started in 1994 steadily declined until 2006 and then flattened out.

“While the odds of going under never disappear, they pretty much hold steady at 5 percent once the businesses reach age 12,” he said.

Sept. 2012: Small Business Failure Rates by Industry: The Real Numbers

Shane reported again in September of 2012 on data drawn from the Census Bureau Business Dynamics Statistics for the year 2005, which reinforced his assertion that survival rates vary by industry.

He compiled the data into a graph that compared survival rates among the following eight industry sectors:

  • Mining (51.3 percent)
  • Manufacturing (48.4 percent)
  • Services (47.6 percent)
  • Wholesaling and agriculture (47.4 percent)
  • Retailing (41.1 percent)
  • Finance, insurance and real estate (39.6 percent)
  • Transportation, communications and utilities (39.4 percent)
  • Construction (36.4 percent)

As you can see, mining companies had a 15-point higher rate of survival than construction firms.

Dec. 2012: Startup Failure Rates: The Definitive Numbers

At the end of 2012, Shane came back with a report that said business startup failure rates had not changed much since his inaugural assessment in 2008.

Citing data from the Census Bureau and Bureau of Labor and Statistics, Shane stated that both data sets revealed that the “typical new business started in the United States is no longer in operation five years after being founded.”

Jan. 2016: Business Failure Rates Are Declining

Shane’s most recent report — published in January of this year — brought good news: business survival rates are on the rise following the “bust” of the 2008 Great Recession, which brought a spike in business failures.

Referencing Census Bureau statistics, Shane said that business failure rates and the fraction of American employers that go under each year are in long-term decline.

He found that in 1977, 12.9 percent of U.S. companies with employees went out of business, but in 2013, that fraction was down to 9 percent.

“While recessions cause spikes in business failure rates, the long-term tendency is toward more, not fewer, small businesses surviving,” Shane said.


These startup failure rates reports conclude that the chances of your business surviving beyond five years depends on its age, size and industry sector.

While, historically, only half to less than half of companies are still in business after five years, survival rates are slightly better now than in years past, so there is a  reason for hope.

Of course, the data is empirical. It fails to take into account intangible qualities such as the entrepreneur’s passion, grit and determination to succeed. While those can’t be measured, they play a critical role nonetheless.


okemon Go Being Used by Hillary Clinton in Presidential Campaign: Report

Pokemon Go Being Used by Hillary Clinton in Presidential Campaign: Report

Democratic presidential nominee Hillary Clinton has started to use the newly-launched Augmented Reality (AR) game Pokémon Go as a campaigning tool to register voters.

The game, which came out on July 6, encourages users to walk around and visit “PokéStops” where they can acquire items for the game like Poké Balls and “gyms” where they can fight against other players.

PokéStops and gyms are real locations in the real world.

“For instance, there’s a gym on a small traffic island by the Vox DC offices and the Embassy of Iraq is a PokéStop and a reliable source of Poké Balls,” news website Vox reported on Friday.

(Also see:  How to Play Pokemon Go in India? Here’s Everything You Need to Know)

Campaign organisers for Clinton started campaigning at PokéStops and gyms to register Pokémon Go players to vote.


Another news website Cincinnati Enquirer reported that Clinton’s Ohio staff spent the past weekend going “from Cuyahoga to Athens to seek out players in their communities to register them to vote”.

There is even an official Hillary event scheduled in Lakewood, Ohio, pegged to the game.

(Also see:  Pokemon Go Now Available to Download in UK, Germany – When is India?)

“Join us as we go to the Pokestop in Madison Park and put up a lure module, get free pokemon, and battle each other while you register voters and learn more about Hillary Clinton,” the description of the event reads. reported that Clinton campaign already has actual people registered to vote as a result of its Pokémon strategy.

Pokémon Go has already overtaken Twitter in terms of daily users and has seen people spending more time on its app than on Facebook.

Citing report from tracking firms TechCrunch reported that the game has not only topped Twitter and Facebook, but also have surpassed dating app Tinder in terms of installs.

(Also see: Pokemon Go Cheatsheet: 10 Things to Know About the Game That Has Everyone Hooked)

“By July 7, the app had been installed on more Android smartphones than the dating app,” Britain-based information technology firm SimilarWeb was quoted as saying.

SimilarWeb said Pokémon Go managed to surpass Twitter in terms of daily active users (100 million) on Monday and now sees 5.92 percent of the US Android population engaging with the app on a daily basis.

Meanwhile, US-based web-based survey solutions company SurveyMonkey tracked Pokémon Go’s peak daily active users and said that Pokémon Go has claimed the title of “biggest mobile game in the US history,” leaving behind other popular mobile games, including Candy Crush, Clash Royale, and Minecraft.

Tags: Apps, Clinton, Games, Gaming, Hillary Clinton, Ninantic, Nintendo, Pokemon, Pokemon Android, Pokemon Go,Pokemon Go India Release Date, Pokemon Go Release Date, Pokemon iOS, Pokemon iPhone, The Pokemon Company



LeBron James used Steve Jobs speech to inspire NBA Finals comeback

The Cleveland Cavaliers made American sports records in fundamental ways this month: they had beenthe primary group to ever put on sleeves inside the NBA Finals, and they brought the first identify to Cleveland in over half of a century. And both achievements, it turns out, have been strengthened by using the wise phrases of the past due Steve Jobs. ESPN reviews that Cavs big name and eventual Finals MVP LeBron James used Jobs’ 2005 Stanford graduation deal with as a device of inspiration to rally his comrades earlier than their sport 3 bout against the Golden state Warriors team that become, at thetime, leading 2-0.

It was due to the fact the Cavs accumulated a convincing recreation three win that there has been ever a sport 5, wherein the Cleveland team confirmed off its sleeved jerseys. further victories and one moreday trip for the sleeves later, James become celebrating his 0.33 Finals MVP award.

The section of Jobs’ speech that James chose to awareness on was the bit approximately the Apple co-founder and CEO randomly dropping in on a calligraphy elegance. it is able to have appeared unimportanton the time, but it gave Jobs an appreciation of the importance of right typography while designing Macsoftware, which ultimately led to the stylish fonts and interfaces that we use in private computers these days. “You cannot connect the dots searching ahead, you may most effective connect them searchingbackwards,” stated Jobs. “you have to consider that the dots will someway join on your future.” Itbecome that simple message that James wanted to impart to his colleagues: a perception that there ismultiple course to fulfillment and a religion in a single‘s ability to conform to changingcircumstances.

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today’s 391f28ade68635a26d417ea25e9ae9c1 device approved by means of the FDA leaves a fewmedical doctors ‘appalled’
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Malware With Mars Rover Code Used to Target India-Afghanistan Relations: Report

Malware With Mars Rover Code Used to Target India-Afghanistan Relations: Report

A high profile Indian diplomat, the Ambassador to Afghanistan, was recently the target of a security attack. The malware was reportedly delivered via an email that was crafted and spoofed to look like it was sent by Manohar Parrikar, Defence Minister of India.

The attack was initiated on December 24, 2015, reports security firm Palo Alto Networks, which obtained a copy of the email. The imposter congratulated the Ambassador to Afghanistan for efficiently spearheading various development projects in the country.

The email came with an attachment entitled “Appreciation_letter.doc” which in turn had exploits for a specific vulnerability – CVE-2010-3333 affecting Microsoft Word. Palo Alto Networks reports that the exploit code was designed to download and execute a file from newsumbrella[dot]net website.

The exploit would download a number of files including Cxcore210.dll and Highgui210.dll files that are based on OpenCV modules. OpenCV, for those unfamiliar, is a library of functions built for real-time computer vision applications as well as machine learning. The technology has been used on a range of things, including Mars Rover.


“During the analysis, it was noticed that Rover’s detection rate is extremely low. This is surprising as the malware lacked many modern malware features, yet it is successful in bypassing traditional security systems,” Palo Alto Networks said in a press statement. “The low detection rate also enables the malware to fulfil the objectives of the attacker getting the information required.”

The ‘Rover’ malware was designed to take screenshots of the victim’s computer, a “heartbeat” signal that would check every five seconds whether the C2 server was running. The toolkit would also steal document files from the hard drive, and plant a keylogger which would listen to every command typed on the system.

Additionally, the ‘Rover’ malware was also designed to search files on USB drives and implant a backdoor which would take photos using the system webcam, record audio, and take screenshots.

In recent times, India and Afghanistan have come closer. India helped fund Afghanistan’s economic development and construction of critical infrastructure, and among other things, a new parliament complex for the Afghan government.

Gadgets 360 has reached out to Palo Alto Networks for more details. The incident goes on to prove how sophisticated attackers have grown over the years.

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Tags: India, Malware, Mars Rover, Microsoft Word, Security, Vulnerability