Do most startups fail because of a bad idea or poor execution
There is no such thing as a bad idea. The reason you say the idea is bad is because it didn't work out. Based upon my experience, I feel that any organization(succesfull startup) is the result of three thing -
Base Idea(X) - This is the idea on which a person thinks about starting a company. Since it is his idea, he is fairly confident about it and he starts out to study the market. If he is entering an unknown market, he has to be supremely confident as well as rich enough to cover the potential loss he may make. As he gains more knowledge about the market, he refines the idea. This is an iterative process and may take some time. Finally it becomes some thing(X') that in his perspective is quite executable.
Vision(Y) - Based upon your and your co-founder's personality(vision and core values), your idea is then transformed into a business plan. In other words you can say that your very basic business plan B = Y(X'). Thus, your business is now ready to take off.
Execution(Z) - You start your business and the business plan now undergoes some more changes. This changed business plan B' along with other factors like your and your team's persistence, market situations, your situation, etc finally changes the path of your execution.
Thus, the condition that your startup fails or becomes a success is directly proportional to Z(B') + Other factors. As you can see, there are lots of factors that decide the success or failure of a startup. And getting these three things right is the ultimate goal of any company. Also another thing I've found as an outsider is that it is nearly impossible to point out the real reason for the failure of a startup. However, it is fairly easy to point out the reason for the success of a startup.
