Best way to fail your startup
Why do so many startups fail? Is it design? Users who do not understand the project? Or is it something else?
You have a great idea. You share it with your friends, they say it’s great. You find an investor (or use FFF). Hire developers. Everybody’s excited. Mark Zuckerberg will definitely call you next week to make an offer.
The product doesn’t get launched after 3,4,6 months. Too many bugs, not pixel perfect. You decide to change the team for better devs. Run out of money. Project fails. The market wasn’t ready for such a product. Developers are not good enough and charge too much nowadays. But you did everything right. Didn’t you?
To understand what mistakes were made, let’s take a look at the top reasons for startups failing and compare them with founders' fears that we usually hear when they try to find an outsource team for their project.
Top 5 reasons why startup fails*
- No market need — 42%
- Out of cash — 29%
- Bad team — 23%
- Competitors — 19%
- Economic is not profitable — 18%
*multiple choices available
That makes sense more or less — no money no honey. But let’s took at the points that founders usually mention during an interview as the top risks for the project.
Top fears of founders
- The system won’t be reliable and may not be able to perform well with a lot of users
- Initial estimates will be exceeded
- Deadlines won’t be met
- Competitors will take the market
- Clients won’t like the design
Where’s the market or end-users of our product in this list? Couldn’t find them. I’ve been on hundreds of calls with potential clients (for web, mobile, and AI development). Guess how many of them talked about their users/clients or the market? Right, couple of them or even less. The main point is to get the project done and then we will be filthy rich with millions of users. What kind of users? How they will know about your project? Why they should choose you? Why they will pay to you? And so on.
And the cherry on top is the projects with a technical task like
do something similar to the site www.awesomeproject.com but with better design
Let’s put ourselves in the founder’s shoes. They are just humans. They have an idea and they love this idea so much, they don’t want somebody to ruin it. They could not imagine that their idea may have no demand on the market. Even if this thought saves them a lot of money. So no testing of the idea, no time to think, start coding as fast as you can.
Can such a project be successful nowadays? Yes, but chances are really really low (much lower than you think).
Ok, the problem is clear. But what should founders do?
Let’s go through some tips on the pre-development stage. IMO 80% of work is here, and 80% of project success is based on this stage.
What should the founders do before the development?
- Write down an idea. You can use something like Lean Canvas to define the basic idea. It’s really important to write it down and share to a development team later
2. Start interviews to find customer’s pain. First of all, you should read The Mom Test by Robert Fitzpatrick. It’s a great book that will allow you to escape social-reliable answers. A couple of hours reading will save you a thousand hours of unnecessary development.
3. Create mockups and compile them into a clickable prototype. Figma is a really great and powerful tool, simple at the same time. You could use other tools if you want to.
4. Test the prototype on real users. Learn about custdev, find new customers, or talk to the ones you’ve interviewed. Again, it’s really important to ask the right questions
5. Improve the prototypes based on the customer’s feedback.
6. Test again. You should iterate until you get the proofs or understand that the project does not suit the market (try to re-think it and do a pivot in that case)
7. Calculate your economics. You could use unit-economics, for example. Don’t try to deceive yourself. If the economics doesn’t add up — you should change the approach or say no to the project before it’s even started
8. Create content for publications in social media: Facebook, LinkedIn, producthunt, local resources, etc.
9. Create a landing page with a website builder— Tilda, WordPress or others
10. Start to generating traffic on your landing page
Why do people skip steps 1–7? Because they like their ideas so much that they can’t imagine that their project won’t be successful
Mistake number 2 — they ask people wrong questions, those that push users to say yes, when they mean no.
If you will avoid these 2 mistakes, the chances of a successful startup launch will be way higher.
I didn’t mention how to deal with designers, developers and investors, it’s another part of your journey and I think it makes sense to talk about it in the next articles.
Be smart, start small, fail fast, grow big.
Want to discuss startups? Contact me via Linkedin or Telegram
Good luck!
