To create something new and innovative you need to also be ready to fail and fail the right way. Failing has become such an essential part of the startup world that there is even a day for it.
So, contrary to the popular belief failing isn’t necessarily bad, it might be even good and necessary. But there are also the failures that should be avoided. The common mistakes that cause the whole startup to break down. Here are 5 of the common ones.
Not all problems are worth solving. Some startups think they have the best idea ever. But they forget that is not enough: someone also has to want to buy it, or preferably: need to buy it. It is always easier to sell and get successful with products that solve a critical problem instead of ones that just ”could be fun”.
Still, many startups get so caught up in their brilliant solution that they forget that to get money from it someone needs to see it so valuable that they are willing to pay for it. Often those startups are also the ones that say everyone are their potential customers. If that’s you, stop now and think. The only thing everyone absolutely needs is air. Good luck capitalizing that.
Do you really solve a problem and is the problem critical enough for people to want to pay for your solution? Emphasis on the word ’pay’. Lots of people want free stuff, but that doesn’t put food on the table. Here’s a post that can help you out with validating.
People need to know your product exists to be able to want it
Your product or service might really be amazing, and not just on paper. You have validated and found that you really do solve a real problem, and problem people are willing to pay to get solved. But that’s not enough.
There are still startups who think that as long as their product/service is good the customers will come automatically. Sometimes that is true: companies get new customers through referrals from their old customers. But you still need to get those first customers. They won’t find your product nor service if it’s hidden in your garage… You need to talk to people. Though of course, sales and marketing are not going to save you if your product is bad. But at the same time, it’s easy to sell a good product.
So, unlike many seem to believe, people won’t run to you if they don’t know about you. Most likely they don’t even know you exist! You need to tell them and you need to explain it simply enough.
…and you need to tell them about it clearly enough
Sometimes this is the most difficult part. You know what you are doing, but your customers and investors don’t. And unless you are a coder and your customers are coders, using industry jargon is going to do more harm than good. You need to use the kind of language your customers use and what investors understand.
Don’t talk about how amazing the “UX” of your product is. Talk about the things your customers really care about, and do it in a language they understand and would use themselves. The way of speaking of for example a parent and a coder are very different…
And it’s the same thing for investors. Considering the amount of jargon startups want to use in their pitches, they must think investors are geniuses. How else would they know everything about every industry? Well, I have news for you: they don’t. When the investors don’t understand what you are saying, they automatically stop listening. And jargon usually does exactly that. And then you are wasting both of your time.
So, forget jargon and explain things as simply as possible. Pretty much like you were pitching to a child (no, you are not offending their intelligence by doing that ;)). In fact, if a child can understand you pitch, your pitch is probably going to be really good!
Wrong kind of team
As it has been said over and over again, it’s not the idea, but the execution. And successful execution is all dependent on the team. Jari talked earlier a bit about the importance of team on here, and how important it is to build your team well. But it is not just about having the necessary skills in your team, but how your team works as a whole.
It is surprising how often internal conflicts destroy the whole business. In those cases, the focus goes to drama and not building your success. Or it might be that your situation has changed and for example, the CEO you had at the beginning stages might not be the best person now. You need to hire well and know when changes in the team are needed.
Hire with care, nurture your team and the team environment and adjust when needed.
- Failing to fail early enough
At the beginning of this post, I pretty much called startups the masters of failing. I should have probably said the successful startups are masters of failing. There are still startups who do everything they can to avoid failing. While not giving up is good, you need to know when to say “this isn’t going to work”. Then you can pivot and start working on something that will work.
The earlier you realize the that the less time and money you are going to spend building something that is not going to work. Thus startups should remember that failing isn’t alway the end of the world, but something they can use to become a much better business.
And there you have it: 5 common mistakes startups make and destroy all their hard work. Remember these and you won’t be one of them! ;)
You might also be interested in: How to pitch to an investor to get funding?