The 3 Biggest Differences Between Companies That Take Off And Those That Fail — And How To Make Yours Successful
Starting a business is hard.
Some founders succeed. But many — however well-intentioned or impassioned they might be — fail, fade, or give up on their efforts.
I’ve worked with many entrepreneurs recovering from that kind of experience. I’ve sat with them, listened to them, looked over their spreadsheets and histories.
And it’s taught me something.
While it may seem on the surface that there are plenty of reasons for a startup failing — it’s a complicated, exhausting, taxing experience — the truth is, there are a few key, somewhat foundational differences separating those who succeed from those who don’t.
Here are some of the biggest distinctions.
1) You don’t know the difference between what people want and what they need.
People, in theory, desire products that solve problems they have. Yet founders who get too fixated on providing customers something with utility — above all else — run the risk of forgetting another, possibly more important truth: most of the time, people buy things they want rather than need.
Sure, users might need an application which helps them eat healthier. But no one’s going to buy it or use it if it’s confusing, ugly, or too hard to use.
Your software application that helps people pay their taxes? It will collect nothing but virtual dust if it’s a headache to download or learn how to navigate.
My advice? Don’t become so infatuated with what you perceive as the importance of your product or service that you forget to make it attractive, fun, or intuitive.
2) You focus too obsessively on perfecting your product — even when that’s not the problem.
The other day I heard a conversation on the train between a woman who owns a custom jewelry business and another woman she seems to respect.
The founder of the jewelry business was detailing her declining sales and describing how she wanted to try and get her products into more retail stores.
“How are you going to do that?” her friend asked.
“I think I need to change the design. I need more colors. More gold — higher-end coloring. That will help. I’m going to re-do everything.”
I sat there pretending to read my book, biting down hard on my tongue.
Look, it’s important that your product or service be great. As I mentioned earlier, it’s important that it solves a problem or provides value for people, and that it’s something they want. But that can’t be your only focus — the sole recipient of your mental energy.
There are many other equally critical components of running a successful business. Neglect those, and you’re in trouble.
3) You listen to bad advice.
This is another fatal mistake many founders succumb to. They figure that all advice — all bits of constructive feedback from every critic, friend, or teacher — should be taken to heart.
The truth is, many of the people founders reach out to for advice simply aren’t equipped to provide you with intelligible feedback on your business.
Even those who do have industry insight or expertise often don’t have the relevant context to give you advice that’s useful.
In fact, generally speaking, you should only lend credence to or act upon advice that’s coming from someone who’s invested in your success or who has experience doing the exact thing you’re trying to do.
Remember: these mistakes can be avoided.
If you’re starting a business today, here are some steps you can take to prevent yourself from falling into the traps above.
1) Focus on making sure your business is future-proof.
Don’t let a business that’s promising or even experiencing success be undercut by someone more innovative or forward-thinking. That’s what happened to Blockbuster and Kodak.
Did the leaders of those companies focus too singularly on their products? Did they take bad advice? It’s unclear. But if they’d worked harder to future-proof their operations, they might still be around.
2) Make sure what you’re creating is something people actually want.
Your product cannot only be valuable in theory or for folks with hardcore tech experience. It also has to be something people want.
3) Stalk the business that’s closest to what you’re trying to do.
This is a big one. Identify the companies out there that you want to emulate. This might be your current competition or your future competition. It doesn’t matter. Find them, and study them.
Stalk how they conduct marketing and build brand loyalty. Ask yourself:
- How do they obtain new customers? Does their website have an opt-in page?
- How do they train their users around how to use the product?
- How do they deliver their products to new users? What’s that initial experience like? Why is it so effective?
- How about their email marketing? What are the subject lines they use?
Familiarize yourself with every disparate component of their business — every moving part — and consider how it works into the cohesive whole. With that knowledge, you can begin figuring out how to replicate the experience in your product or service.
4) Focus on your marketing.
Marketing is paramount. This is what I wanted to tell the woman I overheard on the train. It doesn’t matter how incredible your jewelry, application, or service might be if nobody knows it exists. Just because you build it does not mean “they will come.”
Again, I’m not advising you to move to market with a bad product. In fact, you should be obsessing over your product in the beginning. But once your product is great, you should switch your obsession. Read books on the science. Invest in copywriting. Build your brand, your presence, your thought leadership.
The reason for all this? Marketing and sales are the oxygen which will power your business for years to come.