From Inception to Decline: A Phenomenological Analysis of the Reasons Behind the Failure of Iranian Startups

Abstract :

Introduction: Given the critical role of start-ups in economic growth, employment generation, and innovation, a systematic investigation into the causes of their failure is essential for enhancing the resilience of the entrepreneurial ecosystem. The failure of start-ups is not limited to financial loss but also entails a waste of human capital, weakened public trust in entrepreneurship, and reduced dynamism in knowledge-based economies. This study seeks to identify and deeply analyze the factors contributing to the failure of Iranian start-ups.

Methodology: This research employs a qualitative approach and uses phenomenological methodology to gain insights into lived experiences. The study sample includes 22 participants selected through purposive sampling, comprising eight university faculty members, ten start-up founders based in the University of Tehran’s Science and Technology Park, and four business start-up consultants. Data were collected via semi-structured interviews and analyzed using thematic analysis and Colaizzi’s coding technique.

Findings: A total of 186 codes were extracted, categorized into eight subthemes and two main themes: micro-level (internal) and macro-level (external) factors. At the micro level, personal attributes, weak ideation, and team-related issues were key. At the macro level, ineffective academic training, regulatory shortcomings, underperformance of support institutions, sociocultural constraints, and governance challenges were identified.

Conclusion/Implications: Start-up failure results from the complex interaction of individual, organizational, and systemic factors. The findings provide a foundation for policy reform, educational enhancement, and support systems to reduce failure rates and strengthen Iran’s entrepreneurial ecosystem

References:


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