Building Something Nobody Wants
Problem: The foremost reason why many startups faced death before they even start is because they decided to build a product that nobody wants or needs. They only decide to give it a go and create something without really putting the concept or idea to test in the actual world.
Solution: To keep failure at bay right from the get go, the best thing to do is apply lean startup methods together with the growth hacking process. It lets you test the product prior to its launch for you to determine if it suits the needs of the people or if a pivot is already necessary. Validating your concept and proving your idea is key to avoid failure.
No Partnerships/Alliances
Problem: Owners of startups often make the mistake of thinking that they can do things on their own and they don’t need the help of anybody or anyone. They tend to be stubborn and refuse to ask for help even when they know that they need it. Even worse, some founders ask for help but actually don’t listen to their coaches or mentors.
Solution:For your startup to be successful, you will need partners and allies. Do you know what is a startup? A startup should be focusing on growth… and you shouldn’t do it alone! Aside from finding partners, the process must also be started at the soonest time possible. Your partners will help you create quality products, add services or features to your product, gain better market visibility, streamline operations and make sales. They offer exponential and endless benefits.
Failing to Ask for Help
Problem: Owners of startups often make the mistake of thinking that they can do things on their own and they don’t need the help of anybody or anyone. They tend to be stubborn and refuse to ask for help even when they know that they need it. Even worse, some founders ask for help but actually don’t listen to their coaches or mentors.
Solution: There is no way that you can fly to the moon alone and you can never make your startup grow without any form of assistance. As you cannot simply handle everything physically and mentally when you are alone, seek for help not only for the sake of the business but also for the sake of your health and personal relationships.
Having mentors is key to make your startup succeeds. Mentors should not be overlooked: they have the experience and can guide you to take the right path. They can also prevent you to make the mistakes they might have done.
Wrong Target
Problem: There are startups that have the wrong target for their products which ultimately make them dissolve before they even leave a significant mark in the industry.
Solution: When coming up with a new product or service, startups should focus on fundamentals like solving a particular issue or addressing a need in a different or new way. It is also at this point when you have to identify the individuals or the businesses who are going to buy your product or known as the target audience.
Raising Too Much Money
Problem: Raising too much money might not sound like a real problem. But, there are startups that raise too much money right from the start only to use everything up faster than necessary. Or, they raise too much money and have unrealistic goals from the investors.
Solution: Startups have to remember that too much funding right from the beginning could mean the death of your business. I’d say this is probably not the main reason startups fail but it happens. The trap here is that funders are going to spend a lot without focusing enough on the income. As you design the amount of money you plan to raise, think of 18 months or two years. Don’t go overboard if you don’t want to risk exploding your financial bladder and using the money faster than lightning.
No Revenue Model
Problem:More often than not, most startups concentrate on creating a business model and ignore the importance of revenue model. This was working before where platforms like Twitter would get as many users as possible with the idea to create a monetization system or revenue model after. A few years ago, this was easier than now. Investors want revenue more than just a large user base. Finding a revenue model later on is not a solution
Solution: A revenue model will help you generate revenues. This also helps you identify which source of revenue to pursue, how to price the value, what value you can offer, and who will pay for the value. It also determines what service or product will be created to generate revenues and ways in which the service or product will be sold.
Without a clear and well-defined revenue model, your startup might struggle because of the costs that you will not be able to sustain. Through having the best revenue model, a startup may concentrate on a target audience, establish marketing plan, fund development plans for products and services, and start to raise capital.
Ignoring Users’ Feedback
Problem: Majority of startups will tell their clients that they are their main priority, yet only some actually focus on what their users really need.
Solution:It is not a good idea to ignore the feedback of your clients, even more if you are a startup. If you want to gain the loyalty and trust of your customers, make sure that you know how to pay importance on their feedback. Whether it is positive or a negative one, assure them that your startup will do its best to improve the service to provide them the highest possible level of satisfaction.
Taking in consideration users’ feedback will not only improve their trust and loyalty but will also allow you to make your product more user-centric and therefore increase your sales and competitiveness.
Too Much Competition / Overcrowded Market
Problem: Starting a business in a place with too much competition isn’t a good idea, especially if your brand is new.
Solution:Experts recommend avoiding high competition as much as possible. If there is a lot of competition, this probably means the market is huge. For instance, if you go to industries like blockchain, fintech, IoT, biotech, VR, drones, AR, AI or machine learning, you will have a lot of competition. Of course, you can go to these industries but in these industries, choose a niche that is not overloaded.
You need to find a niche and have a clear value proposition to differentiate yourself from the competition. Don’t be one of many but be one of a kind.
Wrong Time To Market
Problem: Regardless of the type of startup you have, timing is everything. So, if you fail to market at the right time, you will surely end up shutting down your startup in the long run.
Solution:Startup owners should remember that timing can make a difference in marketing their products and services. Wrong time to market your services or products might just cause you loss of investment. For example, if your startup is a clothing line and you offer winter clothes on a hot summer season, expect that your target customers will ignore you.
No matter how cheap your winter clothes are, they won’t buy them because people will look for something that would fit in for their summer goals. This can sound like a silly example and you probably wonder: who would do such a thing but I can ensure you this happens. Bad timing will take you nowhere but failure. So, decide on the perfect time to market and you will see the difference.
Legal Issues
Problem:It includes getting into an area or an industry, which is legally complicated.
Solution:Some startup owners did not heed the lessons of other failed startups. Without learning mistakes from the legal issues have encountered before, you might lose in the long run. So, before you enter a new venture, know the different legal challenges you might face and think if these are worth the risk or not. If you think you won’t get way with some legal issues, choose another venture that’s less complicated.
If you are not sure where to find such information, just go to start-ups’ hubs and incubators in your area and they will guide you where to go.