5 Quick Reasons Why Your Startup Failed
Dipping your toes into the world of entrepreneurship is an exciting proposition, but, like any roller coaster ride, it has its downs as well as ups. It can be hard to come to terms with a project’s failure, and even harder to realize when it’s time to quit, no matter how much time, energy and resources you’ve contributed.
Many startups failed with the initiators lost on why their project crashed.
Here are five common issues which can doom a startup that you’d be advised to take into consideration before going live with an idea.
Reasons Why Your Startup Failed
1. Trying to Keep Everyone Happy
It’s perfectly natural to want to keep the scope of a startup as broad as possible to maximize your appeal to the widest customer demographic. However, spreading yourself too thin can muddle your objectives and leave you with a low rate of customer retention. If you find that your startup is doing better with a certain type of customer, prioritize them when moving forward with your startup. It’s better to build on your successes and leave the door open for expansion further down the line than it is to keep casting your line out for demographics that simply refuse to bite. You’ll also get much better feedback on your startup when dealing with a user base who are enthusiastic about the product, meaning you won’t be treading water by trying to make a service more attractive for a client base that is non-existent.
2. Picking the Wrong Business Model
Getting the right business model for your service should be amongst your top priorities when launching a startup, and ought to have informed the design of your service from the ground up. Whether you’re considering a subscription-based pay model or a pay per transaction model, you’ll need to know how this will play out in relation to your your target audience and the kind of product you’re offering.
3. Inferior Customer Service
This should be an obvious area of concern regardless of the projected size and scope of your startup. A repeat client is worth much more than a larger number of one-time users of your service, not only in terms of revenue, but for helping spread your product with word of mouth recommendations and passive marketing. If you’re scrambling to spend resource on reaching a mass market at the expense of your existing client base, you’re setting yourself up for a well deserved fall. Remember who keeps the lights turned on, and make your existing customers your number one priority.
4. Letting the Product Stagnate
Even if you enjoy an initial surge in interest in your product, you’re going to need to keep innovating to ensure your service stays fresh and can maintain popularity. Listen to customer feedback, and if people suggest new features, take the recommendations seriously and don’t stop looking for ways you can improve the service. If you’re not ensuring that you’ve got a superior product on the market, there’ll be no shortage of competitors looking to take customers with a new and improved version of your idea. As much as anything, it’s also a good look for your brand and people will often be more engaged with a business if it seems like it’s moving with the times.
5. Running Out of Money
There’s an undeniable thrill and a swell of pride at getting a project off the ground with nothing more than a DIY punk rock ethic, hard work and a shoestring budget. However, more often than not this will give way to obstacles and limitations that simply can’t be surmounted without an adequate supply of funding. As the entrepreneur, there are some nuts and bolts roles that, after a certain point, you should be delegating to someone else with the right professional qualifications, be it coding, marketing or something else. This will free you up to apply yourself to more executive concerns better befitting your position. Stick to what you do best and outsource all the rest.
Starting a business will always involve a certain amount of risk, but you can save yourself a lot of heartache by making sure you’ve got the fundamentals covered before firing the starting pistol. The good news is that everyone makes mistakes, and some of the most successful startup entrepreneurs wear their previous failures as badges of honour. It’s good to learn from one’s mistakes, but it’s even better to learn from the mistakes of others.