Why Startups Fail? The “Valley of Death” in LatAm.

The “Valley of Death” is a terrifying term in the startup dictionary. It refers to the difficult period between the initial investment (when you spend money to build the product) and the moment your company actually starts generating a steady income. In Latin America, this valley is deeper and wider than in the US, mainly because access to capital is more limited during the early stages.

Statistics are cold: nearly 90% of startups fail within their first three years. But why? While many founders blame the economy or bad luck, the number one reason is actually “No Market Need.” Too often, entrepreneurs fall in love with their solution (the app, the website) and forget about the problem. They build complex products that nobody wants to buy.

Surviving the Valley of Death requires more than just passion; it requires financial discipline. In Colombia, where cash flow is king, running out of money before finding a “Product-Market Fit” is the end of the road.

“Failure is simply the opportunity to begin again, this time more intelligently.”

— Henry Ford, Founder of Ford Motor Company

The Survival Kit: How to stay alive

If you want to cross the valley and reach the other side, keep these three life-saving rules in mind:

1. Kill the Ego: If customers say they don’t like a feature, remove it. Don’t let your ego dictate the product strategy.
2. Watch the Cash Flow: In the early days, revenue is vanity, profit is sanity, but cash is reality. Monitor every peso that leaves your bank account.
3. Fail Fast, Fail Cheap: If an idea isn’t working, admit it quickly. It is better to fail after spending $100 and one week, than after spending $10,000 and one year.