Startups are made out of ambitious entrepreneurs and creative people coming together to create a product of high quality and extreme profitability. However, countless startups are shattered while only a fraction succeeds, and a fraction of those grows into a ridiculously profitable endeavor.
Developing an air-tight business plan is essential in preventing any random elements within a market. However, markets are living entities made out of people interacting within them. You won’t be able to avoid every hurdle by preparing your long journey to success, but with a good game plan and some nimble navigation – risks will be minimized.
You might also love to read The Biggest challenges of the first year in business. However, for now, I will list seven reasons why startups fail and how they can prevent it:
1. Failure to raise funds
If your dealmakers are still green within the space, don’t be surprised by the amount of doors you’ll knock on before one opens. Venture capital is presented via media as some sort of a golden goose -which cannot be further from the truth. The reason such people have so much capital is exactly that they were meticulous in their decisions who will they fund.
Be direct, convincing and professional. Remember that your potential investor is only interested in the bottom line. He isn’t emotionally invested in your project, he doesn’t care about the tiny details of your development process. The only thing that matters is time, money and return rates. So keep that in mind when raising capital.
2. Ignoring competition
Having a self-centered approach will blind sight you. By observing your competition and monitoring what they bring to the table, you get the necessary perspective to see what your product is lacking and how it will fare against those who also want a piece of that market pie.
By remaining ignorant to this fact, you risk burning down everything invested, thus leaving the table with no chips and a sad face. The point is – be proactive and always keep testing the waters, in the long run it can only be beneficial.
3. Insufficient connections
Reaching the right people can be difficult for some, but isn’t actually that hard to do. You would be surprised by how much people you can already reach. Ask around the office if someone knows a relevant person within the industry. It doesn’t really matter in what capacity that person is.
Utilizing people within all the market cogs (economics, law, media, etc.) is useful since your own business is impacted by all those aforementioned spheres. Still, if you’re out of options, partnering with SEO or PR agencies isn’t a bad idea since they can handle the reach and exposure for your product, while you focus on making it.
4. Fighting with the bulls
Some markets are simply dominated by certain companies. Having an idea for an internet browser that is even better than Google is awesome, but if you can deliver that kind of a product, chances are Google will likely buy you out rather than let you risk their current position. Keep in mind the financial and influential power of your (potential) competition.
Not every market is accessible or even realistic to conquer. For example, even giants like Uber couldn’t outcompete its Chinese counterpart Didi and simply left the Chinese market. Choosing your battles wisely is the key to success.
5. Legal hurdles
Registering a brand, entering new markets, managing the legalities of cash flow and other business related activities requires legal assistance. Having clear paperwork is the best ailment from potential government inspections. Don’t enter the most common pitfall, get some legal aid.
For example, companies like Withstand Lawyers offer services for such startups by providing the legal framework necessary to keep your business legal and sound for all parties involved, which is of pivotal importance.
6. Failing to prototype often
Developing your product secretly has its benefits when it comes down to hiding your secret formula. However, being overconfident and convinced you have the perfect supply for the market’s demand is a slippery slope, at best.
By being afraid someone will steal your idea or presenting an inadequate version for testing, creates a bubble of opinions that can be quite unhealthy for the end result of your product. Constantly have a testing loop for your prototype, the product has to evolve in accordance to the user feedback. It doesn’t
matter if the result isn’t what you’ve originally thought of. The only thing that matters is that the consumers want it, and they have to want it bad.
7. Biting more than you can chew
Lastly, let’s talk about success. If you start making a profit, don’t become overzealous. There are countless variables on why and how you are in your current position. Remember, slow and steady wins the race. Pouring more money into the product isn’t necessarily the end all be all solution.
Analyze your market, quantify the price-per-user and see what works for your business in the most stable way possible. This doesn’t mean you shouldn’t invest big bucks once you get rolling, but rather that you should always be weighing your options and finding the right pace for everyone involved in your product.
The situations I’ve presented are just a fraction of potential problems. Being afraid isn’t a bad thing, being ignorant is. Try finding all the potential leaks in your business structure and work with your stakeholders on how you can fix them. Open your mind to criticism and suggestions, even you can become that fraction of a fraction if you play your cards right.
About Author :
Cate Palmer is a designer, marketer, and writer. Cate’s expertise could be summed up in web design, digital marketing, and business-related topics. Cate’s interests are, on the other hand, wide and ever-evolving.
Best Survival Advice For Manufacturing Startup Owners
Running a Startup is a struggle for survival because it requires staying afloat amid tight budgets and competitive challenges. Some domains are inherently more daunting, and manufacturing is among them. It is a capital-and labor-intensive industry, which makes money the most critical concern. Moreover, industrial safety, quality standards, and efficiency expectations always keep you on your toes. As an entrepreneur, you may face more than you can handle. But it is possible to address the startup challenges and emerge as a winner, provided you take the right approach. Let us share some valuable survival advice for manufacturing startup owners.
Stick to your plan
Most startup owners dwindle after the initial enthusiasm only because they lose focus sooner than later. The worst part of losing focus is that you may try to move in too many directions at once instead of staying true to the basics. Commit to sticking to your original plan and mastering your product and process. You may find tempting alternatives along the way, but your only focus should be to develop your core business. Single-minded dedication to your goal can help you survive even in the most challenging phases.
Reinvent your products
Startup manufacturers who are quick to reinvent their products fare the best. Although you must stick to your plan, it is crucial to keep an eye on the market and the customer’s pulse. If your product does not seem to align, tweak it a bit to match the demand and expectations. A little creativity is often enough to transform a mediocre product into a winning one.
Maximize your productivity
Survival in the manufacturing domain as a beginner is mainly about achieving more with your limited resources. The best way to do it is by maximizing your productivity, even if it means spending more on qualified team members and upgrading your equipment. Although switching to modern equipment at the startup stage sounds like a drastic measure, it can give you a winning advantage. The good thing is that selling used machinery fast is easier than you imagine. You can offer it on an online marketplace to sell quickly and maximize productivity effortlessly.
Invest in lean manufacturing
Lean manufacturing is another wise decision to stay afloat amid startup struggles. It cuts production costs and timelines and ensures quality and efficiency. Going lean is about ensuring that your manufacturing and product design teams are on the same page from the outset. It enables you to cut through the early-stage challenges and ramp up production down the line without sending labor costs skyward.
Prioritize preventive maintenance
Manufacturing success is as much about high-performing machinery as productive employees and well-organized processes. But new manufacturers tend to cut corners in this context. Not investing in preventive maintenance is the worst mistake you can make. It can lead to unexpected breakdowns and downtime, expensive repairs, and safety risks. Conversely, staying ahead of it can lower production costs and downtime risks for your business.
Surviving the challenges of the manufacturing industry as a startup owner is easier than you imagine. Following these simple measures can help you stay afloat and make it to the next stage.
8 Dos and Don’ts for SaaS Startups
When launching a startup, eager entrepreneurs will often hear that inner voice that tells them “Do it!” on every idea that comes to mind. The initial euphoria that comes with every new beginning can be a great drive to work really hard on making a new business flourish. But, if untamed, that excitement can also be a curse.
If you care about making the right choices as an entrepreneur, you need to know when to greenlight strategies that would help your SaaS startup grow and when to hit the brakes on those that would delay its success or, in a worst-case scenario, make it fail.
With that in mind, we’re listing the top eight dos and don’ts every founder should learn for the sake of their SaaS startup’s future.
There’s no success without clear planning and organization. You don’t want to scribble notes or make complex spreadsheets for various operations if there is a simpler, more streamlined way.
To measure the performance of your marketing efforts and sales, use web analytics tools. Remember that all social media apps have integrated analytics dashboards that provide great insight into your campaigns’ performance and keep track of your posts’ engagement.
Cultivating online relationships is what gives a brand the power to reach a greater base of customers. SEO is a complex matter to tackle, but modern businesses, and especially SaaS startups, must make constant efforts in that department if they want any visibility.
So, make building quality backlinks for your website a priority within your marketing strategy. Having established experts in your niche to vouch for your brand and services (and link to you!) is how you instill trust in high-value clients. That’s how you build authority and get to rank higher on search engines.
As your business grows, it’s wise to refine and evolve your products and services to make them more useful and attractive. But, remember that customers evolve too!
We’re sure you’ve studied your target group before launch and learned what they want so you can cater to their needs, but you need to keep consistent and work on these insights regularly.
A good strategy here is to always engage your customers with online surveys or outreach directly to those you value the most. Studying your analytics tools can also provide key data on how your customers’ buying patterns shift.
Sure, your product might be complex or simply feature a multitude of functionalities. But to those that are interested in finding simple solutions, complex offers tend to have the opposite effect on their curiosity.
So, explain how your services work in a plain and simple manner. Introduce clean infographics and short, quality content that demonstrates why your product works.
Use this as a rule of thumb: if people outside your niche can easily understand what your solution is all about and learn its value, it means you’re doing it right.
Learning what your successful competitors do to get where they are should definitely be on your to-do list for building a strong SaaS startup. However, you shouldn’t dwell on all of their tactics without working to figure out an original approach.
Following the exact path your competition took to hit the jackpot will only leave your startup in their shadows. Instead, learn your competitors’ shortcomings and weaknesses and ensure you aim in that direction.
For instance, if they don’t use social media tools properly, use those platforms to get ahead. You can also focus on targeting the keywords that they don’t use to capture a portion of the customers that are being left out.
Wasting precious resources on offline marketing is a terrible strategy for a SaaS startup. Your applications and services are online – and so are your prospects, seeking online solutions to their problems. So why would you even think about offline promotions?
You can always make offline efforts to demonstrate your credibility and put the word about your startup out there, but the online marketing alternatives are far cheaper and deliver way more positive ROI.
You need to be perfectly honest about the solutions that you’ve created and are now trying to market. Chances are, your tools have a good share of shortcomings and bugs that need sorting out, especially when your SaaS business is still in its cradle.
You’d want to please your customers as much as possible, so you need to keep your prices reasonable until your brand and products are perfected and ready to ask for big dollars.
Also, don’t perform marketing suicide and offer your services without a free trial. When you’re only new to the game, you can’t expect to gain traction if you’re not willing to let prospects try out your solutions.
Today’s SaaS market is pretty much oversaturated with all kinds of web applications. While that doesn’t mean that your idea is invalid, it won’t see much light if it doesn’t bring something new to the table.
Even then, you don’t have to invent solutions that no one ever thought of before – you can still keep innovating and refining. Whether it’s a new approach to pricing or another way of achieving substantial team productivity, you can still redesign staple applications and present a new, different way of giving customers an incentive to do business with you.
The challenges that we’ve talked about above are almost inevitable in the first few years of managing your SaaS startup.
Following the simple rules and implementing the tips that tackle each of these challenges will not only secure a lifeline for your business but build a foundation for a successful company for decades to come.
How to Develop a People-First Startup Culture
Creating a start-up from scratch is a great way to flex your entrepreneurial spirit and build a business you can be proud of. However, succeeding as a start-up requires more than hard work and a good product. You must become a business leader and learn to get the most from the people you bring into your new company.
Developing a people-first culture is the best way to find and maintain great talent in a small business. Putting your people first can land your top employees and ensures that your team has the desire and motivation to help your vision succeed.
Big businesses are oversaturated with mission statements and “shared values”. These corporate slogans exist for a reason: they help bind teams together and give everyone a chance to share the business’s vision.
As a small-scale start-up, you should develop your own set of shared values and a clear mission statement that guides your business’s culture. These values and mission statements should refer to the way you want to treat your employees as well as the overall purpose of your business.
Creating an employee-friendly mission statement is also an important part of the people-first approach to business. Today’s talented employees know their value and have heard about the employee-friendly treatment that workers at big firms like Google and Facebook receive. They’re looking for employers who offer a clear sense of purpose as well as greater flexibility and excellent work-life balance.
The rise of remote and hybrid work means flexibility is a priority for employees. Your best employees know that they don’t have to sit in an office from 9 to 5 to be productive and will look elsewhere if you try to tether them to a cubicle for no good reason.
Instead of insisting on creating an office culture, you can invest in coworking spaces that save money and give employees the flexibility that they want. Coworking spaces are typically cheaper alternatives for small businesses and give you better cash flow. Coworking spaces also ensure that your employees have the equipment they need and can pack up when they’re done.
When looking for a coworking space, focus on the nuts and bolts first. There’s no point in renting space if it doesn’t have an adequate Wi-Fi connection or enough equipment like standing desks and keyboards. Once you have a list of top locations for your coworking space, focus on the amenities and perks they provide. Some coworking spaces even have deals with local gyms and health clubs that will look great as a people-first employer.
Achieving an appropriate work-life balance should be a priority as a people-first employer. Even if you’re putting in the hard hours to make your business succeed, you shouldn’t expect talented employees to burn the midnight oil to help fulfill your vision.
Insisting on overtime and crunching will only result in burnout and a high rate of employee turnover. Employees with a poor work-life balance have been known to experience conditions like blurred vision, cataracts, low quality sleep, increased stress, joint damage, and cognitive impairment.
As a people-first employer, you should put the health and wellbeing of your employees first to avoid health-related conditions from burdening your staff — even if this means you have to reduce capacity or take on new employees. Trying to expand your operations by forcing your existing staff to abandon their work-life balance is not a sustainable, people-first approach, and will only lead to cultural rifts and employee turnover.
Operating as a people-first business can boost your startup culture and create better buy-in amongst your new team of employees. Highly motivated teams are essential for the success of small businesses, as you rely more heavily on fewer people during your first years. You can help develop a people-first culture by creating mission statements and shared values that promote the well-being of all employees. This should be translated into real policies at work like offering coworking spaces and a better work-life balance.
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