Why Businesses Fail (And How to Avoid It)
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Hello New Entrepreneurs and Leaders!
Starting a business is one of the greatest adventures you’ll ever take.
It’s not just about making money. It’s an exploration of self-discovery. YOU get to learn more about YOU in the process.
From finding your niche, to solving real customer problems, to shaping your brand’s personality, and building systems that let you scale it’s a magical process… if you approach it with patience and care.
That being said, lets get real and look at the facts and the data behind the life cycle of a small business or company.
According to recent data from the U.S. Bureau of Labor Statistics (via LendingTree):
Within 1 year: ~21% fail
After 5 years: ~48% have closed shop
By 10 years: ~65% are out of business
By the data chances of keeping a sustainable business decrease the longer you are in business!
Why? Because too many companies start strong… but lose the spark. They stop evolving. They stop adapting to new markets, new technologies, and new customer needs.
787 Coffee has been in business for 11 years. And trust me, it’s not because the road was smooth. We survived Hurricane Maria. We survived COVID. We had to pivot, adapt, and re-strategize to stay relevant and keep our doors open.
That’s the real lesson of entrepreneurship: Adaptability is everything. Your ability to evolve with technology, markets, and customer behavior is more valuable than any product you sell. That’s why leaders like Tim Cook keep Apple at the top, they never stop moving forward.
It is easy to have that first year fire in your belly when you start your business. But if you want to outlast your competitors and build a true legacy, you have to be in it for the long game.
I will show you 6 case studies of once-successful businesses that didn’t make the pivotal changes to stay in business, and strategies to avoid these situations so YOU have the best chance of making shIT happen
-LET’S DO THIS!
Blockbuster – The “Too Comfortable” Trap
What Happened:
Back in the early 2000s, Friday night meant one thing: Blockbuster. The smell of popcorn, the walls of DVDs, the late fees (ugh). Then Netflix showed up, offering DVDs by mail and eventually streaming movies online. Blockbuster laughed. Literally they passed on the chance to buy Netflix for $50 million. Today, Netflix is worth over $200 billion. Blockbuster? One store left in Oregon as a tourist attraction.
Why They Failed:
They believed they were untouchable. They thought their audience would never change their movie watching habits. Spoiler: they did.
How to Avoid It:
Don’t get too cozy. Markets shift, tech evolves, and customer habits change faster than your favorite TikTok trend. Always ask, “If I were starting fresh today, what would I do differently?” Then actually do it.
Perspective: Understand that distribution channels are key to generating your sales. Brick and Mortar although still effective, is not the only channel of distribution there is. Now with online and implementation of AI technology. The way customers interact with products and services will constantly change. BE Aware of your distribution channels.
Toys “R” Us – The Outsourcing Disaster
What Happened:
Toys “R” Us was the magical kingdom of childhood. But instead of building their own online store when e-commerce started booming, they signed an exclusive 10-year deal with Amazon to handle all online sales. The twist? Amazon started letting other sellers sell toys, basically cutting Toys “R” Us out of its own future.
Why They Failed:
They handed over their online destiny to someone who was also their biggest competitor. It was like letting your ex plan your wedding.
How to Avoid It:
If something is essential to your brand’s future, keep it in house. Partnerships are great, but control the core parts of your business especially the customer experience.
Perspective: Learn that you are not the only entrepreneur using certain platforms. Everyone in the market has a similar product and service, but what makes YOU different. The most important thing is how do you differentiate yourself in customer interaction and experience. Humans buy YOU more than a product. The more you develop customer relationship and experience, the more it will set YOU apart from your competitors.
MySpace – The “We Forgot About the Users” Mistake
What Happened:
Before Instagram filters and TikTok dances, there was MySpace. Everyone had a profile with glittery backgrounds and their Top 8 friends proudly displayed. But then the ads started flooding in, the layouts got messy, and the site became slow and clunky. Facebook swooped in with a clean, simple design and won the crowd.
Why They Failed:
They stopped caring about the experience. They focused on short-term ad money instead of long-term user loyalty.
How to Avoid It:
Never forget who you’re building for. If you keep your users happy, they’ll stick around. If you annoy them, they’ll leave without looking back — and they’ll take their friends with them.
Perspective: Simplify EVERYTHING you do. simplified processes=efficiency and higher customer retention and satisfaction. The reason Apple is revolutionary and staying relevant is because, the technology they develop is so simplified that a 5 year old can use it. Simple solutions and clear processes for your product or service build lifetime loyalty with your market.
Quibi – The “Nobody Asked for This” Launch
What Happened:
In 2020, Quibi launched with $1.75 billion in funding, betting big on short-form, high-quality Hollywood content for your phone. The problem? People already had TikTok and YouTube — free platforms with endless content and sharing options. Quibi didn’t allow screenshots or social sharing, killing any chance for organic buzz. Six months later, it shut down.
Why They Failed:
They assumed people wanted what they wanted to make, not what the audience actually needed.
How to Avoid It:
Validate your idea before you go all in. Ask your audience. Build a small version. Test. Adjust. Don’t try to force something the market isn’t ready for — or just doesn’t care about.
Perspective: Do your research before trying to take an industry head on. Understand what makes other successful and don’t let EGO take over. Understanding business is understanding human behavior. Businesses adapt to the wants and needs of the customer, not the other way around. Listen to your audience feedback, adjust your strategy, and execute.
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Forever 21 – The “Grow Fast, Burn Out” Strategy
What Happened:
Forever 21 grew like wildfire in the 2000s, opening hundreds of stores globally. But they expanded too fast, ignored the rise of online shopping, and missed the cultural shift toward sustainable and ethical fashion. By 2019, they filed for bankruptcy.
Why They Failed:
They chased speed instead of stability and ignored the values of their younger customers.
How to Avoid It:
Scale smart. Make sure your systems, finances, and team can handle growth. And keep a finger on the cultural pulse — if your audience cares about something, you need to care too.
Perspective: Scale and lead from the heart. Do you really know your “WHY?” At 787 Coffee, our mission is simple: we only work with farms that treat our planet right. Ethical, sustainable, and always in harmony with Mother Earth. We partner with small rural farms to make sure that quality and consistency are KEY. Humans feel genuineness and authenticity, your customers will smell it right away if you’re looking for a quick buck. You will quickly close up shop if you don’t have a purpose behind what you do.
Get your creative juices flowing and BUY 787 Coffee! link below
Kodak – The “Inventor Who Missed Their Own Future” Fail
What Happened:
Here’s the painful part: Kodak invented the first digital camera in 1975. But they buried it, fearing it would hurt their film business. Fast-forward a couple of decades and digital photography took over, leaving Kodak scrambling to catch up. By then, it was too late.
Why They Failed:
They were afraid to disrupt themselves. Instead of leading the change, they resisted it, and competitors took the lead.
How to Avoid It:
If you have a game-changing idea, don’t hide it just because it threatens your current business model. Better to be the one who disrupts yourself than let someone else do it.
Perspective: Biggest life lesson to accept is that life will constantly change. Don’t be afraid and be different. The idea you have that others may say “that’s silly” or “it will never happen” will be the biggest innovation in the world! it is in your hands to make it happen, or someone else will.
The Big Takeaway
Businesses fail when they stop paying attention, to the waves and fluctuations of the market, to their customers, and technology.
The fix? Stay adaptable. Stay curious. Always be paranoid.
The second you think you’ve “made it,” you’ve already started falling behind.
But here’s the good news! YOU are 100% in control of your ability to keep moving forward. Markets will change, trends will shift, challenges will hit… and you’ll still have the choice to make it happen.
Every single setback is a training ground for the next level. Every time you adjust and push forward, you prove to yourself (and your competition) that you’re not just here to play the game, you’re here to outlast.
So keep your eyes open, your energy high, and your mindset hungry. Your business can be the one that doesn’t just survive, but thrives for decades.
Let’s make that your story.
Let's get to work. 💯
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3 Easy Steps to Apply This to Your Business or Life TODAY
These three concepts—Adaptability, Market Awareness, and Customer Connection—are the survival tools every entrepreneur needs. They’re the difference between being the next Blockbuster and becoming the next Netflix.
So, what do you do with this information?
1. Stay Adaptable: Review your products, services, and processes every 90 days. Ask yourself, “If I were my own competitor, how would I put myself out of business?” Then make the changes before someone else forces you to.
2. Watch the Market: Spend at least 30 minutes a week researching trends in your industry. Follow your competitors, read industry news, and pay attention to shifting customer needs.
3. Keep Your Customers Close: Engage with your audience directly—through social media, surveys, and in-person conversations. Ask for feedback, listen to it, and act on it quickly.
Mastering these three moves means you won’t just survive—you’ll stay ahead. It’s the difference between riding a wave and being crushed by it.
Want more straight talk and case studies on building a lasting business? Follow along and learn how to build a brand that doesn’t just make money, but make history.
Let’s simplify the concepts:
Starting a business is like deciding what fruit to sell at school - first, figure out what you're naturally good at and what you love (Step 1: maybe you're great at organizing things and you love healthy snacks, so think about selling fruit). Then, spend a week asking your classmates what snacks they wish they could buy at school and what they hate about the current cafeteria options (Step 2: this is like checking if people actually want apples or if they're tired of the same old stuff). Finally, test your idea small by buying 10 apples for $5, selling them for $1 each at lunch, and seeing if you can make your first $10 profit (Step 3: if kids buy your apples and ask for more tomorrow, you know you have a real business idea). Most people just dream about selling fruit but never actually bring apples to school - but you're different because you understand that taking one small action (like bringing those 10 apples) teaches you more than months of planning what the perfect fruit stand would look like. Stop thinking about becoming the "apple business kid" and just bring the apples!