Why Most Startups Fail and Here’s How Not to
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Why Most Startups Fail and Here’s How Not to

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There will always be special individuals who find exceptional ways to kill their business, like setting fire to your parent’s garage, destroying the code as well as the backups. But the majority of ...

There will always be special individuals who find exceptional ways to kill their business, like setting fire to your parent’s garage, destroying the code as well as the backups. But the majority of startups fail in far more mundane ways.

Here are the key reasons I’ve seen startups fail… and ways to avoid making the same mistakes

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Why Most Startups Fail and Here’s How Not to Why Most Startups Fail and Here’s How Not to Presentation Transcript

  • 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
  • and
  • your competition will hitthe market with a good basic solution.
  • Hence
  • keep it lean
  • get to market fast
  • and
  • 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
  • and
  • 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
  • and
  • 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.
  • so
  • 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
  • and
  • 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
  • But
  • 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