Tips for Running Your Startup:
The research shows that nearly 95% of startups fail. These stats have been revealed by Shikhar Ghosh, a professor from Harvard. He states that 90-95% of startups fail to achieve the goals set before the launch. 70-80% fail to get the desired ROI. And 30-40% end up with a full liquidation of assets and disappear as a result.
The CB Insights platform lists the main reasons for startups’ failures:
- No market demand – 42%: Almost half of all businesses try to deliver unclaimed goods and/or services.
- Ran out of cash – 29%: Almost one-third of startups can’t manage their funds properly and end up with empty pockets.
- Not the right team – 23%: A number of companies fail to gather a team of professionals who pursue common goals and visions.
- Get outcompeted – 19%: There are essentially more successful businesses that attract more customers and earn more.
- Pricing/cost issues – 18%: It is related to ongoing expenses and inaccurate product/service positioning.
Well, it’s pretty pessimistic. But you don’t want your business to end up like this, do you? It doesn’t matter whether you’re just thinking about a new startup, running your brainchild for the first week or trying to improve the existing processes, the following tips should help. They cover the most important ideas and suggestions for startup leaders. Enjoy!
1- Build a Reliable Team:
23% of startup owners fail to build a profitable business because they don’t have like-minded teammates. It’s obvious. You can’t create the next Google or Apple all alone. Thus, don’t hesitate to dedicate time and resources to find, hire, and train committed workers. And then keep them happy and motivated.
It’s important to find people who really love your business concept. For instance, if you’re building a blockchain-based cryptocurrency trading system, you’d like to team up with tech geeks, experienced traders, and cryptocurrency enthusiasts. Building a team to work for a charity organization, you should look for altruistic people who have enough spare time.
2- Focus on Customers:
It’s no secret that we are entering the customer-centric era. While this concept has been viable for dozens of years, only now companies begin to focus on customers fully. Here are a few notable ideas for your customer-oriented business:
- Collect feedback. By analyzing a lot of data, you will understand what your target clients need. For this, conduct surveys and reach customers through different channels.
- Evolve all the time. Based on the info collected, improve your processes, products, and services to meet the users’ demands.
- Forget about other people. You want to satisfy your clients. Even if the target audience is small, stick to it to get the brand advocates. Later, you will be able to expand.
- Reach out to the smallest groups. Define the whole audience, its groups by age or other parameters, and also target individual customers.
3- Cover One Niche:
During his lecture at Stanford, PayPal’s co-founder Peter Thiel told that entrepreneurs should start their business within small markets. Thus, new businesses can succeed in a friendly environment with little competition to grow and evolve smoothly. Thiel noted that a lot of new companies make mistakes trying to enter larger highly-competitive markets.
Expanding on the previous point, let’s remember that entrepreneurs should focus on the users’ needs. When you start a new business, think about your clients. Who do you work for? Who will use your product or service? With a clear understanding of the target audience, you will be able to enter the most suitable market. Keep it small until your company grows.
4- Measure, Measure, and Measure:
Talking about feedback and evolution, we can’t neglect the idea of measurement. It’s impossible to grow without knowing how your business is doing. Thus, you should pay attention to growth metrics and KPIs. There are several indicators, including profit, costs, customer lifetime value, customer retention, net promoter score, and so on.
Some experts suggest using the One Metric that Matters or OMTM. According to this strategy, you should choose one KPI and prioritize it. You can use other metrics but the first one should be the most important. To select a correct OMTM, analyze your business and the target audience to understand which parameter reflects the company’s success better.
5- Take a Loan if You Can Repay It:
Finally, let’s talk about money management. A lot of startups fail due to mistakes related to finances. Sometimes, it’s really difficult to maintain a new business properly. Initial investments, development costs, taxes, unforeseen expenses, you will need money for everything. However, there are several financing options.
Apart from traditional venture investments and credits, there are business loans. They can provide you with the necessary funds to launch a startup, improve it, hold a marketing campaign, and more. It’s important to understand that loans must be cleared, and they often come with an interest rate. Thus, opt for this method only if you’re ready to repay regularly.
Other Useful Tips & Tricks:
Apart from the above-mentioned holistic approaches, we also have a list of useful tips. Look through them below to know how your startup can succeed and how to avoid problems:
- Analyze advice in the context: You will find a lot of suggestions, but don’t forget that their efficiency depends on various conditions.
- Don’t be afraid to start small: In the very beginning, startups don’t see high growth rates. But even a tiny increase a week will result in huge figures over time.
- Choose an appropriate name: It’s one of the most important steps in your marketing campaign. Be creative, simple, and clear.
- Get a savings account: It will act as a protection for your business. In case you are strapped for cash, you will be able to use this money.
- Go Phygital: Depending on your goals, you may want to use all channels, online and offline. But focus on your audience.
- Have a plan and stick to it: It sounds obvious but it’s a vital part. Even more, get a few plans: for marketing, for development, etc.
- Protect intellectual property: If you do something new and innovative, there will be competitors. Protect yourself with patents to avoid huge losses.
- Remember about scalability: It may be difficult to focus on big things but your project should be sustainable in the long run.
- Stop being a perfectionist: We all want to run business flawlessly. But mistakes and problems are inevitable. Accept them and learn from them.
- Study laws: Or have a lawyer to perform this task. Often, startups fail because they can’t comply with the local and/or international industry rules.
Despite the undeniable usefulness of the mentioned tips, they aren’t a panacea. All of these approaches work only when implemented carefully. Some entrepreneurs don’t need omnichannel development because they rely on local land-based interactions only. Others can easily skip financial advice because they have enough funds already. It all depends on the initial conditions and the startup’s goals.
To be successful, you should do your homework. Don’t implement these tips blindly. Instead, try to understand your business, your market, and your audience. Good luck!