-An article by Adebayo Anthony
Instagram id @tonybayo_
90% of startups fail. This is the hard and blunt truth, but one every entrepreneur should be aware of. Because we all need a dose of reality now and then to keep our head straight. Cold statistics like this are not made public to discourage aspiring entrepreneurs, but to encourage them to work harder and smarter.
There are numerous reasons why startups fail and it would be impossible to list all in this article, so rather I’ll point out just a few very common reasons why startups fail to scale through the early stages of their life cycle.
1. Not Solving a Big Enough Problem:
Now the problem might be one that affects only 40% of the people in a particular region, but the entrepreneur has to ensure it’s a problem that 40% desperately need a solution to. The greatest mistake you can make as a startup is to create a product that doesn’t solve a big enough problem. Such that your prospective customers could still live with the problem or worse come up with a solution to solve it themselves.
If the pain point isn’t significant enough, there’s no need creating painkillers for it. Basically if you have to convince people that the problem you’re solving is actually a problem. Then your startup is already in trouble.
2. Unbalanced Composition of Team Members:
“The first five employees will make or break the startup” – Oliver Holle.
Having an unbalanced team with regards to the competencies of the individual members often infringes on the growth of the company.
In most cases there is lack of important skills needed for the technical implementation of the idea or lack of team members with good management skills.
The founder of NOUNCER attributes the failure of his startup to the fact that he did not have a partner who balanced him and provided plausible checks for business and technological decisions.
3. No Business Plan or Poor Planning:
Many small businesses believe that business plans aren’t too useful. To them looking beyond a year is too great an opportunity cost, better to spend time making money than planning.
A business plan forces you to define your Unique Value Proposition (UVP) – what differentiates your product from its competitors.
Maintaining a sustainable business model requires setting yourself apart from the competitors.
Without coming up with aan appropriate plan, most lack the yardstick by which to measure the progress of their business and hence are unable to pinpoint areas that need to be reassessed or fail to notice in time when the business starts operating below expected objectives.
4. Unsustainable Growth:
Business growth and expansion Is always welcome, in fact that’s the whole essence of a business, except when it happens too quickly. Too much business growth can be bad for startups. In business, slow and steady wins the race most of the time.
While expansion is always welcome, what smart business managers and entrepreneurs should strive for is “controlled expansion”. Trying to take on more business than you can handle usually results in quality decline. You are overwhelmed and your product or service suffers.
Sometimes saying no is part of running a business. Rapid growth is only welcome when it doesn’t affect your product quality.
Let’s turn our attention to some strategies that aid the growth and sustainability of startups.
1. Do the opposite of all the mistakes mentioned above, especially the first one. Look for a very significant problem to solve. If you’ve actually tried to find a solution to a problem and been unable to, you may be on the right track.
In the words of Selin Sonmez (Founder of Knock Knock City), “When you find yourself wishing for a solution to a recurring problem, go create the solution”.
2. Identify Your Ideal Customers:
Without a clear understanding of your audience, you are most likely to iterate on the wrong product enhancements, construct the wrong marketing messages and more. These miscalculations can cost any startup a lot of money. Before creating a product or service its important you draw up a clear picture of your ideal customers.
3. Monitor Your Competition:
Keeping an eye on the competition is useful for certain reasons. They may have already solved the challenges you’re facing, therefore monitoring your competition might bring you closer to success. Sometimes you might discover your product sadly isn’t as good as your competition. At that point you are forced to improve quickly or get pushed out of business.
Fail to monitor the competition and you might be another WESABE. Wesabe is a Personal Financial startup that did not monitor the competition. Though the startup was first to market. Mint, another financial startup offered a better user experience and innovated its way to the top.
Wesabe never recovered.
4. Constantly Review Your Business Model:
One of the most important things to do after starting a business is constantly checking whether you are achieving your business goals or not.
Also make a revised model and update your goals if you feel they are becoming outdated.
Regularly inform your team about the updated goals and expectation.
Create a strategy that is likely to get the business to the heights you want and never hesitate to change the strategy if you see that it’s not working out.
These strategies will be helpful in providing the much-needed boost for the growth and sustainability of businesses as well as helping them walk toe-to-toe with competition.
ARTICLE WRITER
Guess I have a lot to do.. thanks for sharing
ردحذفYou're welcome feel free to contact me for further assistance if needed.
حذفThis is a nice read
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