Most entrepreneurs think they are building the next big thing and are very much confident about their idea. They have a strong belief of having their startup scale up in no time.
In reality, over 90% of them fail.
So how can you turn your ideas into reality?
Are you solving people’s problem and making their lives feel better?
Most people fail because they make mistakes that they could have prevented. Preventing them will allow to work on things that actually create value for your customers.
Want to build a successful startup?
Prevent These Mistakes.
Mistake 1– Focus only on building and not on customers.
Life is too short to build something nobody wants!- Ash Maurya
Try to solve a meaningful problem for other people. Most startups fail because they don’t understand the market need or the actual desires and wants of customers.
Founders get an idea for their startup for which they start building a solution and try to sell their product.But what eventually happens is they fail to sell their product or service and as a result the startup dies.
Don’t just focus on building your product. Try to embrace the negative feedback and start thinking of better solutions. In this way your initial brilliant idea will kickoff to reach its zenith.
The solution to the Problem
Customer Development is a method developed by Steve Blank, one of the entrepreneurial masterminds to increase the success rate of startups.
The principles of this method are:
- There are no facts inside the building. Talk to your customers as much as you can even if that means doing things that don’t scale up. Try to understand their pain points. In this way you can be authentic and gain mass trust.
- No business was built on nice to have features. The most important thing is to make your customer more successful by solving their biggest struggles, challenges. “Nice to have features” cannot guarantee success for your venture.
- No plan survives its first contact with the market. Don’t spend too much time drawing them up. The only way you will be able to grow up your startup is to build your product with proper user research. Embrace feedback and open up your opportunities to explore more on your startup idea.
Lack of Focus
Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.”-Zig Ziglar
Doing partnerships without proof of extra revenue, spending time on advertising and PR before knowing you have got the right product for the right customer, are some of the silent killers of the potential of your startup.
The Solution to the Problem
Basically the only two things that you should be focusing on when you are in startup phase is Users & Product. Develop the product and make a survey for the consumer behavior surrounding your particular product. Talk to as much users as you can. You just don’t have to be preoccupied with other things.
A One-Person Team
Individuals don’t build great companies. Teams do! – Mark Suster
The 3 essential things to create a good startup are:
- Source talent where required and take advantage of automation.
- Make something customer actually wants.
- Spend as little money as possible.
Research says that solo founders take 3.6X longer to outgrow the startup phase. A balanced team has a 2.9X more user growth than an unbalanced team.
The Solution to the Problem
Reach out to the public and get some idea if the proposed product or service would get some traction. With this general framework, start building on it and keep the target audience informed.
Source talent where required and take advantage of automation. If you are with good people from the start, making something that your customer really wants becomes 100X easier. Find at least one person from a different discipline to join in. Surround with like-minded people waiting to explore similar ideas.
Provides necessary yet unique functionalities. Learn about similar products from other players in the market and understand their product functionalities to have a competitive advantage.
Mistake 4 – Premature Scaling
“Premature scaling is putting the cart before the proverbial horse. The more a company grows, the further away from profitability it becomes.” -Michael A. Jackson
Premature scaling basically means too much too soon.It happens when your business expands faster than you or your product is ready for it.
Startup Genome in a report published in 2011 identified premature scaling as the number one cause of startup failure.
The main goal of a startup is not to be a startup anymore. Resist the urge to raise money till you reach the product market fit. Most founders also try to justify raising a round by hiring more specialists in their start-ups which often leads to hiring too many too early. Some founders equate startup culture with fancy offices and employee perks. Fancy offices does not mean more output.
The Solution to the Problem
- e Figure out who your customer is: Figure out who your primary customer is,what problem they want you to solve and how can you montize this customer. This means you need to find a problem affecting major population and how they will be paying you for the solution to the problem.
- Product Market Fit: Create a product that is in demand and serves a large market. Test,validate and determine the product features and use feedback to grow the next version thus acquiring more revenue generating customers.
- Channel Fit: Lower acquisition cost and increase revenue so that you can make profits. Cost to acquire a customer should always be lower than their lifetime value. Ones you know this equation you can step up and scale your business. Choose predictable growth over too much too soon.
Choose Customers Over Products. Choose Success over Failure.
Want to build a successful startup? Reach out to us at firstname.lastname@example.org. We will guide you in your startup journey. Follow us for more such updates!