There are more than 20 reasons why startups can fail but today I am going to summarize the first four largest ones. While introducing a new product to market is not a guarantee for success, ensuring that you have these four key things in your business can dramatically increase your chance of success.
Before you start writing your business plan outline, it’s important to know about how your product will solve your customer’s problems. If you are just starting out with a new product, it’s vital that you validate your idea and reach out to potential prospects that will be committed to use your product. Almost half of the entrepreneurs are obsessed with their shiny new ideas and completely ignore if there is a market demand for it. With that, they will put 100% of their effort on it such as putting seed funding in place, assemble right leadership and team. Not knowing if there is market demand for your product can already reduce your chance of success by 50% before you even start!
We all heard this old saying “It takes money to make money”. This couldn’t be truer for startups. You can have everything in place and doing it right but stopped cold in your track if you don’t allocate enough funds for your business. So before you quit your job, drop everything and jump into your venture, make sure you have enough capital in place to make it happen. You should also set some additional funds in place to cover mistakes you are going to make or things that will be out of your control. Believe me, those things can happen quicker than you expect so be prepared to have the right finance to take care of those bumps and setback.
You have millions of things to take care of in your startup – bringing in the right team will pay huge dividends in the long run. It’s expensive and time consuming to change team midstream so do your diligence and bring on the right people from the beginning. Even if you have to pay higher fees for the right talent, it will save you money in the long run since the team will build exactly what you need. You also reduce risk of missing time to market with the right team.
It doesn’t matter how many features you add to your product. There will always be someone who will compete with you by adding even more features and lowering their price. If you only sell product to your customers based on price, you are putting yourself at a serious disadvantage. Ensure that your solution solves a PAINFUL problem your customers have and willing to pay for to mitigate this risk. Understanding your customer’s need and tailor your solution for them can reduce your chance of being outcompeted and increase your chance of success.
The Biggest Mistake Is Ignoring the Law of Supply and Demand
90% of all Startups FAIL because they ignore this advice