4 Startup Slip-Ups That Lead To Failures
The devil is in the detail: whenever a young, unexperienced entrepreneur forgets this thesis, bad consequences are waiting for him right around the corner. We’ve all heard the statistics: nine out of ten startups inevitably fail. But, of course, every entrepreneur hopes to be among successful 10%, and nothing could be more disappointing than the fact that your long-developed business was destroyed due to minor slip-up. So, what are the details startupers keep neglecting when launching their projects?
Slip-up #1: No One Needs It
It looks diabolically logical – before one implements his idea and creates a startup, he has to perform a research and to find out about the needs of the potential target audience. However, some of entrepreneurs get so overwhelmed with the greatness and innovation of their soon-to-be-created startup that they forget to check its practicality. Launching a standard project in highly competitive sphere is more reasonable than creating and promoting a product that creates no demand.
Slip-up #2: Inaccurate Business Model
Startupers tend to underestimate the complexity of the customer acquisition and to build excessively optimistic business models. Unfortunately, success depends on the multitude of business factors (demand, marketing, costs, timing), and one has to think realistic to reach it. It’s not that hard to build a logical business model if you follow one easy rule: you have to acquire enough customers to cover the expenses on your project and to spend less money on getting your clients than they will bring to your business.
Slip-up #3: Technical Details
User-friendly structure of the website, smart design, easy-to-remember address, the availability of daily hosting, tech support 24/7 – it might seem like a hard task to pay attention to each of these details, but if there is a general rule for entrepreneurs in every field, it should sound this way: “Everything matters”. Just imagine you losing your clients due to the unexpectedly expired web hosting or because of absence of qualitative technical support, after you have spent so much time attracting them.
Slip-up #4: Lack of Cash
The saddest miscalculation of all in a startup is a financial miscalculation. Actually, every startuper has two options – either you reach a previously set milestone, or you manage to achieve self-sufficiency. Often the problem with cash is that after getting certain profit with the help of particular tactics, the entrepreneur stops monitoring the current rate of efficiency of the said tactics – and then suddenly finds out that his expenses were twice as big as in the previous case, turning bankrupt. Not a single detail should be let out of sight when it comes to the costs.
Of course there are also other minor problems that often create major business tragedies – like product being mis-timed, choice of the wrong marketing strategy, communication problems (within the team or with investors). It’s important to be able to monitor all the aspects of the start-up, and that is why the responsibilities have to be divided strictly between the members of the team. Weekly reports help a lot as well. Good luck – and don’t slip up!
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.