Why Most Startups Fail and Here’s How Not to

It’s easy to think of thelatest startup like a pimple in themiddle of your forehead:

you wake up one morning and it’s all you can see.

And then, one day, for no specific reason . . . it’s gone

Really

“Anyone know whathappened toWhatchamacallit?”

After someenquiry, allyou’ve got isahandfulofrumoursand a bucketof spin.

All weknow forsure isthat it’sover.

Truth is, most of the time, itfailed because of the samereasons so many otherstartups fail.

There will always be special individuals whofind exceptional ways to kill their business

majority of startups fail in far more mundane ways

#1. Notunderstandingthe user

Your plans arebased on what you thinkthe user wants

maybe you even have afew buddies who thought it was cool

and how theylike doing things

Be careful about telling them how they should act

Be careful about telling them how they should act this usually backfires.

#2.Too in love with the tech

You love adding features

“Wouldn’t it be awesome ifwe could also let them Skype with the dead?”

You’re building an elephant

You’re building an elephantbut haven’t tested any of it

Maybe usersonly need the trunk.

Keep it tothe coreand market-testbefore yougo wild onfeatures

Getting thiswrong hasmassive knock-on effects.

#3.Launching too slowly

If you’rebuilding that elephant, you’ll keepholding backon the launch untileverything is perfect.

AlwaysRemember

It willnever be fullyready or tested

your competition will hitthe market with a good basic solution.

keep it lean

get to market fast

add functions as user demand warrants it

#4. Noreal salesstrategy

Capturing 20 percent of the market is not a strategy

Who will be your firstcustomers?

How do youreach them?

What does it requireto close the deal?

How manysales peopledo you needto do this?

What willthe salesnumberlook likebased onall ofthis?

Brush past thesequestions

you willhave drasticallyoverestimated yourrevenue.

#5. The market is too small

It’s easyto pick aniche thatdoesn’tseem toochallenging.

Remember you may face competition

even in that niche

end up with a potentialmarket that is just too small to support a sustainable business

Make sure your market is big enough

and growing(And (I know what’s on your mind)

#6. Basiccopycat

Enter the many thousand Grouponclones around the world.

groupon sosastaWorking internationalconcepts have been launchedsuccessfully locally

Fashionandyou

Doing this in a busymarket because you seecurrent players makingtons of money is a surerecipe to burn cash and stay small.

Be different, not “the same but better”

# 7. Fast burner

You ramp up your costs for a big development team tomatch the massive revenues you expect.

The revenues don’t happen

you’re suddenly burningmoney faster than a new MP planning gala dinners

Get into the market with the basic product and start generating revenue

When the conversion metrics showyou’re getting it right

then you can grow the spend

There are more reasons why startup businesses fail

these are the mostimportant and common

Of course

theeasiestway notto fail

is to not start

Fortunately

you’re not scared

and now you’re just alittle a little more likely to make it.

@Abhishekshah

http://www.linkedin.com	174
http://breaktimeforall.com	102
http://appitive.com	100
http://www.mindtalk.com	23
http://dev.m.mindtalk.com	13
http://m.mindtalk.com	7
http://us-w1.rockmelt.com	3
http://chrome.mindtalk.com	3
http://feeds.feedburner.com	2
http://localhost	2
http://www.synchtube.com	2
http://www.siftsocial.com	1
http://tweetedtimes.com	1
http://light.mindtalk.com	1

Why Most Startups Fail and Here’s How Not to

by Abhishek Shah

Accessibility

Categories

Upload Details

Usage Rights

14 Embeds 434

Statistics