An investigation on reasons of startup failure: The role of entrepreneur

Entrepreneurship is very crucial for the development of the economy as a whole. Although there are many startups, most of them fail within a short-time of their establishment. In line with this fact, this research aims to find the startup failure reasons. The specific concern of the study is about the entrepreneurial reasons more than external factors. Effectuation theory was selected as the theoretical framework for this research. The motivations and problem solving logics of the entrepreneurs are investigated with narrative interviews. Eight entrepreneurs were interviewed for the research. Based on Effectuation principles, it was found that the entrepreneurs using Effectuation on their decision making process are more successful than the others who use more causal decision making during the initiation of the venture. The findings from the interviews were also supported by the secondary resource analysis. Keywords: Effectuation, startup, entrepreneurship, innovation