3 reasons why most startups fail
Read this to make sure you avoid the dreadful date with failure
A hard truth to gulp down: 90% of startups fail.
In fact, the process is quick and by the time you read this sentence, one startup might have failed out there. No, I’m not trying to scare you. I just want you to come out of the cloud and have a healthy dose of reality!
Because I am sure you don’t want to be part of the lowering statistics, right?
How can you avoid your dreadful date with failure? What is crucial for startup success? Is there a formula for startup success?
To be honest there is no straight answer.
There are hundreds of factors involved that contribute to startup success.
However, among them, there are three factors top the list. These factors remain universal and are constant among all the successful startups out there. More interestingly, if you focus on getting these three factors right, yours can be one of the 10% startups that succeed.
What are these 3 factors?
They are-
- The right market
- The customer-centric product
- The customer-centric goal
Let’s discuss this in detail:
The Right Market
According to a recent study, most of the startups fail because of the lack of proper market research and utilisation. Their story somehow goes as follows:
- The founder comes up with an idea, falls in love with it
- Spend whatever s/he saved to build the product or service
And when they set out to sell it, no one or very few buys it.
Well, most times, it does not even end here- they go ahead in the mad race.
The company tries harder, spends more time, energy and money. Yet, hardly build a fan base.
The result, the A team has no money and the startup dies.
So, what’s the solution?
Do proper market research.
Spend time to know the market- Do surveys, have detailed conversations with the target audience. Meet industry professionals to know the recent trends. Do research with 360 perspectives (at least try). Then sculpt and develop the idea accordingly.
The Customer-Centric Product and/or service
Customer is the king!!
Our forefathers said this and it still stands true!
After the market research, offer your customers what they want, always. Build your product and services around their needs and provide the best… no the bestest in the market!!
Meanwhile, keep research, production releasing and manpower expenses in mind. This does not mean compromise with the quality. Rather, being smart and flexible.
For this, you will have to do a lot of market research. But along with that will also include a competitor analysis.
Focus on building something better, greater and more valuable product and/or services than your competitor. Along with that, try offering it at a competitive, yet profitable price- This is where thinking out of the box and a strong team will back you up.
Give your customers faster results, relieving services at a competitive price.
This is where the eCommerce businesses have an upper hand of the local businesses.
Stay a little more agile and attached with your customers to get their feedback about you. You can highlight their feedback to build your business or even learn from and improve it.
The customer-centric goal and communication
You need to have a customer-centric goal to let the customers coming to you. Because your products can be copied but your values can’t. Besides, there’s an added truth-
More than your product, your audience is interested in why!?
Why are you offering them a product or service? Why should they come to you?
But clearing your “why”, “what” and “who” is not enough. You’ve got to communicate it well. For which, along with research and analysis, you will need the right team!
Many products fail even in the right markets because of one big, fat reason- They didn’t have their goals right.
In a few cases, when they had their goals right, they lacked in communicating it.
You might have built the best product out there. But if you don’t communicate the features and benefits of the product, no-one will know or hear about it. And unless your potential customers hear about it and believe that it’s the right product for them, it won’t sell.
That’s why your communication matters. Without the right communication chain, the right product cannot reach the right market and won’t succeed.
And those are the three crucial keys to your startup success. If it doesn’t make much sense right now, don’t worry. We’ll revisit them more in-depth in future.
Now, it’s your turn. According to you, what matters most for startup success?
