The ugly truth is that three out of four startups fail. Try being the one that doesn’t!
“But that won’t be me!” you’re saying to yourself. “My idea is brilliant! Everyone wants my product!”
Unfortunately, it takes a lot more than a great idea to launch a startup and much more to make it a successful one. There are thousands of would-be entrepreneurs out there with brilliant ideas that simply didn’t take because of funding issues, a bad marketing strategy, or any number of other reasons.
Here are seven likely reasons your big idea is currently on a fast track to the startup graveyard.
o My Business Model is borderline pathetic
A great product idea does not make a business model! If you can’t monetize your product while acquiring customers at a reasonable rate, you have no hope of scaling your product or establishing a revenue stream. Unless you are planning to run a charity organization, you’re not going to make it very far.
I get it, business models are boring. It’s a lot more fun to hit the ground running and turn your idea into a reality. But that doesn’t mean you can skip the important steps of market research, competitive analysis, and developing a monetization strategy. If you’re so negligent as to skip these important steps, you’re only leading yourself on a slow, painful journey toward startup death.
o I am a Know it All… Hmmm…
A mentor? Business advice? Who needs that! With all your brilliant ideas, you’ve got this covered. Instead of humbly seeking the wisdom of successful entrepreneurs who’ve gone before you, you’re reinventing the wheel all on your own.
Forget venture capitalists who want to guide your startup to a successful launch. They can keep their money – you don’t want them meddling in your business! After all, as a first time entrepreneur, you know everything there is to know about successfully launching a scalable startup. Right?
o No one will fund ME!
Any entrepreneur anywhere will tell you, it really does take money to make money. If you can’t find access to funding, whether through family and friends, an angel investor, or a business loan, you’re going to have a tough time getting your product to market.
o Did I Even Think About a Marketing Plan?
You’ve been so focused on developing your brilliant idea, you completely forgot to develop a go-to-market strategy. What will your sales process be? Who is your target market? How will you reach your customer with news about your product? Do you have any idea?
The old “if you build it, they will come” philosophy might work in baseball-but unless you’ve been hearing voices lately, you probably shouldn’t expect the same for your startup. No matter how great your idea may be, no one can buy your product if they don’t know it exists. If you want any hope of saving your startup from certain doom, you need to devise and implement a solid marketing plan to spread your company’s message and increase demand for your product.
o Customers hate ME!
Well, no they don’t. Not yet, at least. But that’s only because, as we just discussed, you don’t have any customers. But if you did magically discover some first-time customers, they would quickly be bad-mouthing you all over town, because your customer experience is absolutely atrocious!
Do you have a plan and a properly trained team in place to make sure your customers are happy? How will you deal with complaints? How will you back up the quality of your product? What will you do when things go wrong?
Oh, nothing is ever going to go wrong? Is that right? Keep dreaming…
If you put yourself in the position of delivering a bad first impression with your customers, you’ll never be able to recover. There’s almost nothing more dangerous to a new business than a bad customer review.
o I am Stubborn
The truth about the startup world is that things change constantly. You have an idea for a product, but the research tells you to go a different direction. You’re halfway through development, and then a competitor shows up out of the blue with a product exactly like yours. Few, if any, ideas make it to launch without several changes along the way.
If you can’t roll with the punches and adjust your business model when challenges come up or new information prevails, you’re doomed to live out your days talking the talk about your big idea that went absolutely nowhere.
o I am Running Out of Cash
The challenges above may have halted your startup’s progress, but this one will be the final nail in the coffin. In the startup game, like in Monopoly, running out of cash equals game over. You’re done!
But not for you, right? You’ve got this. With no set budget, you’ll keep the Dom Perignon flowing every night of the week. It’ll all work out, right? After all, you have a brilliant plan!
At some point, if you haven’t secured funding and don’t have a solid plan in place to get a revenue stream flowing, you’re going to run out of cash. Even the most frugal of ramen-eating, Grandpa’s garage-based startups needs cash to keep the lights on.
Inevitably, this will be the moment when your almost brilliant venture officially goes under. You’re out of money. The show can’t go on. You’ve failed.
If your startup is still on life support, stop and re-evaluate. Which of the areas above sounds most familiar? How could you turn around your strategy?
Figuring out why you were on your way to failure might just be your ticket to performing the miracle that turns your near-failure into a real deal StartUp Success!