Many startups fail. Nobody argues about that. But do we look at why they fail, and how we can learn from them, rather than reassuring ourselves that we’re somehow different?
These are some of the pitfalls to avoid on the route to startup success. Delivering on each of these doesn't be any means guarantee success, but it does reduce the likelihood of failure.
1- You lack persistence.
Stop giving up so easily. The 21st Century is one of instant gratification, yet building a startup takes time and effort. Keep creating content. Keep reaching out to existing and potential customers. Keep reviewing progress and adapting accordingly. It doesn't happen overnight.
2- You can’t stand out from the noise.
You need to be able to acquire and retain customers, and to do this you need to be found. It’s not good enough to have a great value proposition if nobody reads it.
Get your marketing right, then aim for more (of the right)traffic, better conversion ratios and lower churn. There are thousands of startups and small businesses out there, and you need to think about how you will be distinctly better.
3- You’re trying to please everyone.
Too many startups try to be ‘all things to all men’. Don’t do this; find a niche, understand their needs and pain points and then build the MVP to secure them as customers.
Constantly changing, modifying and adding custom features to your product can be extremely time-consuming and ultimately damage your user experience.
4- You don’t take outside advice.
Leading a small business or startup can be an isolating, lonely experience. With this comes the very real risk that you lose perspective and can no longer make objective decisions for the overall good of the business.
Much like larger companies, funded startups often establish a board. If you don’t have a board, don’t panic. Approach a number of individuals that you trust and respect and use them as your reference points for large decisions and issues that you’re struggling with. It goes without saying that those individuals need to have a both a respectable level of experience and a willingness to help you.
5- You've not understood the needs of the market.
Validation. Have you validated your idea? If not, you run a very much heightened risk of embarking on an expensive journey to nowhere. How many potential customers are there? What problem are you solving for them? How big is their pain point? How will you reach them? Have you talked to potential customers? How many? Will. People. Pay. You. For. This?
6- You’re all about the idea, but not the execution.
Ideas are fun; they take your brain on journeys of discovery and provide you with a euphoric sense of genius.
But ideas are also worthless. Worthless without the ability to execute. You need not only a concrete plan, but the ability to execute on it. Oh, and also the ability to be flexible and agile when that plan needs to change.
Your idea is probably nowhere nearly as good as you think it is either. Sorry.
7- You have the wrong people on the team.
Smart investors pay huge attention to team composition. Backing an incredibly intelligent team with a good idea but weak leaderships skills often doesn't end well.
Your team needs to be made up of individuals who are smart, committed, flexible, customer-focussed, believe in the business vision and are willing to admit when they have got it wrong.
8- You’re running out of cash.
Oh yes. The big one.
Running out of money, whether your own or somebody else’s, is one of the biggest killers. To avoid this, plan your finances with more detail and honesty than you think necessary. In terms of expenditure, capture it all. The rent, the equipment, the tea and coffee, your insurance, the buffer for unexpected expenses. Don’t cut corners in predicting your spend, and you’ll not be surprised later down the line.
Give the same level of attention to your revenue, and make sure you understand it all. Where is it coming from? How much of it is there? How secure is it? When will it arrive?
Plan out your income and expenditure for at least 18 months, and track it accurately. Sure, forecasting is always guesswork to some extent, but you need to start with a baseline somewhere.
So, there you go. At first glance, this looks line a large list of things to avoid. Sounds negative, doesn’t it? Don’t think of it that way. This is an opportunity. Assess your business and make the necessary changes to increase your chances of longer terms success.
For more business advice, perspective or if you fancy a chat...get in touch!
Dunwiley offers business advice, coaching and strategy consulting to startups and small businesses. If you want to know how to grow your business, how to be more profitable or need another perspective, get in touch. We're based in Salisbury, Wiltshire but work in London, Hampshire and surrounding counties.
Drop us an email and say hello: we can be found at firstname.lastname@example.org