Startup Dead Zone

The ‘dead zone’; this is the purgatory where start-ups are either cleansed of their inability to serve the needs of their respective markets or they, like most start-ups, die a painful death. This is a familiar and very dangerous place to be in because it could literally make or break your venture. Based purely on my limited experience in the start-up realm the dead-zone can be defined as any prolonged period of time where your early-stage start-up makes money but experiences little to no growth. What makes this zone exceptionally dangerous for start-ups is that you get fooled into believing that your start-up is doing okay, it is after all making money. The problem is by ignoring the growth problem you are actively choosing to focus on the wrong goal.

A start-up by definition is a temporary business entity carrying out a series of business experiments based on a set of assumptions with the objective of growing into a big business. If you are not growing for a prolonged period of time, your start-up is in crisis as it cannot, absent user growth, become a big business.

Why?

There are a number of reasons a start-up may find itself in the dead-zone. Firstly, it is possible that you misread trends in your market.

Here is a prime example, you launch an, ‘anything goes freelance marketplace’ absolutely ignoring; i.) the fact that the freelance space is oversaturated with businesses doing the exact same thing, ii.) South African companies have a general distrust for freelancers — they would, at most be willing to work with freelancers with a proven track record on Upwork or someone they have worked with in the past and iii.) that talented developers do not want to be given silly tasks by clients who are clearly trying to exploit them by offering below market rates (and refusing to pay once the project is complete). The start-up in this example may, if it is lucky, experience some growth. However unless it changes its approach by building a solution that factors in the three problems stated in previous sentence the start-up is unlikely to experience any further growth simply because the founders have misread market trends.

In order to prevent the aforementioned from happening you need to stay abreast with things happening in your market and its drivers. Ask industry related questions on Hacker News or to industry experts on Quora if you must, have constant discussions about your market in order to keep in touch with the trends that are continuously defining your market space. This may not get your start-up out of the dead-zone but it will give you greater insight on your market.

There are numerous other reasons you may find your start-up stuck in the dead zone including, but are not limited to; not solving a pertinent problem and not changing your product, or marketing approach to accommodate changing user needs. Finding the reason requires some introspection from your part. You understand your start-up and your metrics well enough to figure out why it is not growing.

What you could do?

I will not pretend to be an expert in entrepreneurship as I have a clear understanding of the limitations of my knowledge, but I will propose a few solutions that I believe are worth trying. Since a start-up is by definition a series of experiments you can start off by re-evaluating the assumptions your experiments are based on. If you were for example to build a Slackbot that charges companies to send a summary of their analytics to a Slack channel of their choosing you may, if you are not growing for a prolonged period, want to reconsider the assumption that people would want to subscribe to the services offered by your Slackbot, maybe you ought to shift from a subscription model to once of payments and upsell your clients.

Alternatively the problem could lie in the fact that the solution offered by your start-up has not been communicated clearly enough to attract more users. Save for a few early adopters, people are generally too conservative to use a service that doesn’t have a very clear purpose. This is not a bad space to be in as it gives you quite a lot of leeway to experiment and/or pivot in order to figure out what problem you should be trying to solve, how to communicate your solution clearer and which market you need to target. Do not remain stagnant for too long, try different things and try them as quickly as possible- trade perfection for speed, but do not do things haphazardly, there has to be a balance.

These are but a few suggestions that may or may not work for your start-up. The fact however remains the same, if your start-up is in the dead-zone you have to do something to act as quickly as you can to get yourself out of that position. It may happen that your start-up is simply a small business that cannot scale into a big business by virtue of the market you are targeting, if that is the case then this article probably does not apply to you.

Like what you read? Give Emmanuel Sibanda a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.