Five Reasons Why Your Startup Can Fail
When you found your own startup it can feel like a dream. With your new company you will finally be able to pursue your dreams. You’ll be your own boss and you can do your own thing, without overbearing bosses dishing out orders.
But founding a startup can also be a major risk. Here’s a list of the things to watch out for when if you want your startup to avoid failure.
1. Ignoring Customers
According to the lean startup method, one of the most effective ways to make your startup a success is to cater to your early customers. You should be listening to their needs, helping with their concerns and figuring out how you can help them.
Additionally, you should also be hearing them out when they come to you with complaints and concerns. If a customer comes to you with a problem then it’s not because they want to bring you down. It’s because they want to make the product better for themselves and their fellow users.
If you ignore the things that customers say or do you will quickly find your startup spiralling into failure. People won’t want to buy or use what you’re offering (since it doesn’t help solve any of their problems or stresses). But they will have little faith in you either, and that’s a recipe for disaster.
2. Competition
Another common reason for startup failure is competition. Both a lack of and having opponents that are too strong to go up against.
In short, if the industry you’re has no competitors whatsoever then you should avoid it. For example, if you are the only startup out there that sells giant metal shoes to people in Australia then the chances are, there isn’t much of a market for your work.
On the other hand, you need to look closely at your competitors and figure out if you can beat them and if your startup’s products are doing something different to theirs. A good example of how companies can coexist are Burger King and McDonald’s. Yes, they are both fast food chains that sell burgers and fries but McDonald’s is cheap whereas Burger King has higher quality burgers that cost more money.
3. The Wrong Team
In order to make your successful startup dream a reality, you’re going to need a great team behind you. A team who is as committed, as passionate and as dedicated as you are.
The teammates that you hire should have a genuine interest in the industry that your startup is in. They should be able to reel off the names of your competitors (and their products) off of the tops of their heads. And most importantly, they should be able to look at your products and services and say ‘this is what we need to change to make it better’.
If you fail to hire a team that has the same drive as you do, then don’t expect them to stick around for long.
4. Lack of Money
Paying those team members’ salaries and paying for the office space that they’re going to work in is going to cost money.
Now, it is possible to be a startup on a budget, it’s called bootstrapping. However, you will need at least some money to get yourself started and that will mean scrimping, saving and thinking carefully about your finances. Alternatively, you can also use some of your budget to build an MVP (Minimum Viable Product) and use that to entice investors.
5. Marketing
Imagine you’ve got a great team, your competition doesn’t stand a chance and you’ve got enough cash behind you to take over Wall Street. This all means nothing if nobody knows that your startup exists.
Marketing is vital to everything you do as it makes people trust your startup. It tells people about your products and ultimately, it will propel your startup to success. That’s why we encourage you to start getting the word out about what you do even before your product release. This early buzz can snowball so that by the time your product launches, everyone is raving about it.
Don’t let your brilliant achievements go unnoticed.
