Startups always kick off on a wave of optimism, often with the desire to change the world. But as things float along, too often young startups will hit rough waters as they try to go to market hard and fast. The problems usually start before the first sale: it all comes back to their product, service, or plan. Startups not solving a clear market need are cursed to pivot or fail - but that's just one "hidden" threat in the early days of starting a business.
Here are the 6 biggest mistakes startups make in the early days that might doom them.
Is your product unique enough?
To become a successful startup, you don’t need to come up with a new concept that changes the game - but you need to be doing something better than anyone else, usually 10x better. Many startups make a lot of money by taking existing products and improving on them, but these improvements have to be different enough to warrant a new innovation.
You have to convince your customers that there’s enough merit in purchasing a new version of what they already own. Simply republishing something in a different color isn’t going to fly.
Is there a market for your product?
Another reason why people may not be buying your startup’s wares is because there was never a market for it in the first place. It's a common scenario: hackers and hustlers move so quickly that might interpret feedback from friends as validation, thinking there is enough value in their goods that it will appeal the mass population.
Not the case: you need to work out whether there’s any mass appeal, or at least enough people in your niche to warrant your startup.
There are no magic numbers for the amount of demand you need to have, but the smaller the market, the faster you are going to have to evolve once you get started. Following Peter Thiel's classic model, aim for a market you can monopolize.
Does your product actually solve the problem?
Every startup has heard the advice that they need to go to market quickly, which helps founders take advantage of trends. But realistically, it rarely works out without many bumps along the way: in their haste to go to market, startups begin to compromise on the quality of their offering. Research reveals that one of the prime reasons for startup failure is scaling too fast.
While it’s expected that you will never have the perfect product, it shouldn’t be riddled with errors and flaws either. Word will quickly spread that something doesn’t work as well as it should, and it will curse your public relations. In a world where customers are deeply influenced by online reviews, this could be a damning scenario.
It’s always worth putting off a product release just so you can work out the major problems. Don’t accept second best because you want to do things quickly; built a solution that works well, even if it means cutting extra features, and release the stable version, not ones held together by spaghetti code code and duct tape.
Do you have a go to market plan?
A good product can still fail because it wasn’t marketed in the right way. So what is the right way to market something? It means reaching the right target audience. You need to know who wants your product, and then to figure out what sort of advertising they respond to.
Marketing is half the battle because with so much competition in business today won’t know you exist unless you take action - so have a marketing plan, and make sure you're using it on the right people: those who are willing and eager to pay for your help.
Will demand for your product last?
All products have a certain shelf life. This doesn't mean you can expect only 6 months of sales from the first buzz around your launch. Rather, after a certain buzz has dissipated, sales will reach a baseline which often falls as promotion decreases - unless the demand for the product is exceptionally high.
You need to think of your natural progression from one product to the next, which includes the features you prioritize in developing. You have to keep people coming back for more. If not, your momentum will fizzle out and you’ll struggle to maintain any traction with your target audience.
Conclusion: It's all in the research
Everything goes back to the research you should have carried out from the beginning and your business plan. A startup should never go to market unless they have a firm idea of who their perfect customer is. They should know who they are, what they want, and what they respond to. Then they should know everything about their competitors and what they have on offer.
This is the most strenuous part of the process of launching a startup. It’s your duty to take the time necessary to go through all this.
What are the biggest startup mistakes you have seen people make?