How do you avoid being part of that 90 per cent of startups that failed?

There’s always a dream behind every startup; loaded with ambitions, desires, and irreplaceable persistence. So – why do startups fail? If entrepreneurs know what they want and are on a mission with total conviction, what stops them from achieving it all?

Are bad ideas the reason that startups fail? No – Google was also considered a bad startup idea when it was proposed. But then, it’s not always the idea that costs your business, sometimes it’s for a  few other reasons, including the A-team.

The personal readiness for the role

Most early entrants into the startup world may find it exhausting. There are cases where entrepreneurs take out equity on their own home. Also, putting themselves and their family members in continuous debt is not new – we often hear of similar cases in the entrepreneurial ecosystem.

Plunging into a business may leave you in a position where it gets tricky to circumvent such problems.  It is critical you stay prepared. You will be under pressure to balance your emotions as you pursue your startup dream; to move fast in business and still keep good mental and physical health, as well as develop a compassionate mindset.

Ask yourself if you are ready to invest ‘all-in’ of yourself in this new role? Consider consulting your friends, family and the closed ones. Maybe it is just the right time for you and the right version of you as you decide to begin this entrepreneurial (mis)adventure.

What does the market research say?

You have successfully launched a business, but have you researched about the market demand for the product or services you offer? It would be important to conduct such surveys as they help gauge whether your idea will turn out to be a successful one. Also, it helps you to identify existing problems that your potential users are facing and gives a clearer idea of what the solution should look like.

It’s difficult to be fully sure that you are the first one to roll out such offerings as there may be some similar business offerings. Reach out to them or at least read about them to identify whether they have succeeded? If no, why did they fail? You will need answers to these questions and find out a way to differentiate yourself in the market.

It all boils down to how you execute the offerings once the market research is done. Some of the businesses that fail to launch their MVP can attribute it to their lack of execution discipline, as well as a lack of brand to lean on. Some businesses fail because they go all out without conducting adequate market research and they try to peddle products that are not required at all. Sometimes the product may evolve as an experience but then it may also limit the number of re-purchases.

Also Read: How Go-Jek evolved from a startup to a tech unicorn in less than 10 years

But then, what if your market research fails? It may happen that this will have you pushing your products towards the incorrect target market. What if your data on the market size is wrong? The product positioning may cause your business to veer off in the wrong direction even before it is launched.

Keep the answers of these three questions ready before you are ready to launch:

1. Are you clear about your target market and its specific problem?
2. Is your business able to provide the best possible solution to that problem?
3. What is the size of your target market? Is it well-defined? And most of all, is it big enough to sustain your new business?

Inablility to focus – in a single direction

A new business will demand a lot of things from your end, but then sometimes you will need to pause and introspect. You may be multitasking but then you will have to ask if it actually moves the needle. If it doesn’t, stop wasting your efforts.

Most startups will fail due to routine stuff that hampers the growth:

• Networking –. Sure, business partnerships can turn profitable with the right contacts but it is recommended to network wisely so you do not waste time.
• Don’t be in a hurry to form a board of advisors once you get funding
• Stop multiple partnership businesses if you don’t see any revenue in a predetermined time.
• You should not be channelizing your own and your team’s effort on PR and social media unless you are highly confident that you have the right product for your target customer market.

Now, you only have two important things to focus on if you really want to succeed. There is no third way out.

1. Users

Understanding where they come from and what they seek from your offerings is an important aspect of success. User engagement is equally important because after acquiring them, that’s how you will be able to engage them for a longer time and extend the Customer Lifetime Value (CLTV).

2. Product

This is the heart of your startup –  always endeavour to improve product offerings. Talk to users, address their issues and enhance their experience by altering your product accordingly. If you really want your startup to be a successful one, you’ll be spending the majority of your time in improving your product.

Optimistic entrepreneurs tend to function as a one-person team

Y-Combinator’s co-founder Paul Graham points three important things that drive a successful startup.

1. A team of genuinely dedicated people;
2. Offering precisely what your target customers want;
3. Reducing outflow of cash as much as possible

From the above-mentioned points, if you want to achieve the latter two, fix the first one. Good people will build a significantly useful product and this will also fix your problem of unnecessary expenses. Make sure you create and retain your A-team for the startup as they will be the ones leading the attack from the front. The research suggests that the average solo founders may take around 3.6x longer to scale their startups no matter how focused they are on growth.

Also Read: The essentials of managing your business financials at 4 stages of its lifecycle

An ideal scenario will involve having at least one person onboard from each department – marketing, development, designing, etcetera. If you have the right team who are experts in their own work you are almost certain to provide customers with what they really need – 100x easier than you’d rather do it alone. As a team, the long hours get more bearable and you’ll have each others’ back through all thick and thin. The perils of being a one-man army are not confined to just inefficiency but could also lead to a failure in the longer run.

Conclusion:

Though 90 per cent of startups fail, some entrepreneurs striving for success may want to settle for average results. But if you truly want to be in the that 10 per cent and hit the jackpot, try to be mindful and avoid making mistakes that are common across all the startups that failed.

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