Approximately 90% of startups fail before becoming profitable, often due to a few simple errors. Almost half of these tech company failures are due to products that aren’t actually needed by people.
Other common reasons for startup failures include a lack of funds or team members who are underqualified for their positions. These figures paint a dismal picture of your chances of succeeding. Knowing the most common pitfalls to avoid, on the other hand, can give your startup a fighting chance at survival.
1. Concentrate on the most important features
Great startup ideas are frequently based on the founder’s own personal problems. This is due to the fact that the founder is the best person to describe such a solution. If you can find others who have the same problem, you can also bring early adopters on board to help refine your product’s value proposition.
The process of determining the product’s required features and validating the concept is critical to ensuring that your product roadmap is on track.
At this stage of product development, making the right decisions is critical for survival, as 42 percent of startups fail due to a lack of product-market fit.
When creating the Minimum Viable Product, you must be cautious (MVP). This can be accomplished by focusing solely on the features that users require to achieve their objectives. Uploading attachments is more important to a project management app than custom emojis.
2. Dive deep into the weeds of online debates
You should release your product to a larger segment of your target market once you’ve validated your MVP and applied multiple iterations of user feedback.
Even if your product has all the right features, you can still lose out to a competitor if no one knows about it. Furthermore, most startups do not have the funds to hire a large sales team or run an advertising campaign. This is unquestionably a drawback.
This challenge does not necessarily mean that your startup will fail, but it does mean that you will have to do a lot of manual promotion.
Participating in online conversations with potential customers is a common strategy for promoting a startup, and it also helps you refine your idea. The main disadvantage of this strategy is that it is difficult to scale. As your idea gains traction, you’ll need to change your marketing strategy at some point.
3. Use customer feedback to your advantage
It’s critical to keep your customers and their problems in mind as you develop your product if you want to hit your sales targets. A customer-centered solution to an existing problem can quickly generate demand. Whether it’s a completely new product or simply filling a market gap, this is true.
Inexperienced entrepreneurs frequently attempt to achieve a tech company goal without first devising a strategy to accomplish it. Market research, product development, and understanding your customers’ needs, on the other hand, will pay off in the long run.
Once you have a business plan, branding, and funding in place, you can start thinking about marketing your product. Market research, whether formal or informal, should always be closely linked to your product.
Customer feedback and reviews are both low-cost market research methods.
This is especially useful if you intend to sell your product on major eCommerce sites such as Amazon. The necessary functionality is built into the structure of these platforms. This makes it simple to learn what your customers think of your product.
4. You should sell your product before you start making it
Getting paying customers on board as soon as possible is a good way to avoid running out of money, especially if you’re a startup.
Customers who buy early on have a financial stake in the product. In exchange for the features they want and are willing to pay for, they’re usually willing to give their opinions. One of the most crucial turning points for a young startup is determining whether or not people will pay for the product you’re planning to build.
Pre-selling an MVP can be done in a number of ways.
You can concentrate on achieving a single user goal, demonstrating the need for the feature, and encouraging early adoption. You can also combine existing products to create your own one-of-a-kind offering, which can help you save money. Another option is to perform the product’s functions manually until you figure out how to automate them.
5. Assemble a fantastic team and motivate them with your vision
A successful startup requires assembling the best team possible. Typically, you should concentrate on accounting, marketing, and operations, as these are the most important aspects of most businesses.
In the tech industry, however, finding qualified employees is particularly difficult.
There is a software developer shortage in the United States right now. You might not be able to find anyone with the skillset you require. Even if you can find someone with the necessary qualifications, you may not be able to pay them the wages they demand.
Fill every position on your team with the same care and enthusiasm. It’s easy to believe that if you’re a tech company, you should splurge on top dev talent. Instead, appoint someone with less experience to oversee the marketing department.
However, this can easily lead to problems in the future and a decrease in the company’s overall success.
Starting at the top and working their way down the org chart, each leader must be enamored with the vision and be able to communicate it to their team or department as they build it out. Even if the department is only one or two people at first, having the right leader is critical for all departments.
6. Emphasize your MVP to attract funding
Many entrepreneurs make the mistake of believing that obtaining funding is the first step in launching a technology business. It should, however, be done later in the process. It’s more important to make sure there’s a market for your idea.
Before seeking financial backing, find some early adopters and validate your MVP.
While increasing funding for self-serve acquisition and improving infrastructure can be beneficial, failing to start large sales and marketing campaigns early is a common cause of failure.
Seeking funding after you have a validated MVP and paying customers will also help you compete more successfully for investor capital.
7. Be prepared to fail
Because speed is so important when starting a business, you’ll make a lot of decisions without doing a lot of research.
Some of these decisions will be incorrect, causing a short-term setback. It’s critical to consider decisions as malleable, allowing for improvement.
Rapid decisions are a necessary part of the calculated risk-taking that comes with starting a business, but that doesn’t mean you should just throw money at it.
When it comes to making decisions, running your own business necessitates being pragmatic. This is especially true when it comes to evaluating your own flaws.
Summary The combination of the unpredictability of a team and the uncertainty of a volatile market poses a significant risk in and of itself. Furthermore, due to the complexity and rapid advancement of technology, only a small percentage of tech startups will succeed.
On the other hand, this fact enables entrepreneurs who employ the proper strategy to outperform those who attempt to build a tech company in the incorrect manner.
Keep these pointers in mind to get a leg up on the competition and get your business off to a good start.
Learn more from business and read 6 Businesses That You Can Start For Less Than $1,000