90 percent of startups fail within 5 years of inception. (Source)
(Courtesy: Flicker Leap)
This number paint the darker picture of the startup ecosystem that we live in. So, just because everyone’s doing it and there seems to be quite a hullabaloo in the mainstream doesn’t necessarily means it’s going to be easy and that you will succeed. In fact, the odds are against you if you’re planning to launch a startup.
Here are top 5 mistakes startups continue to make even after all these months and years:
(i) Offering a product that nobody wants
Over the years, the market has seen many senseless and stupid products. For instance, did you know that in 2005, a company launched a “Cheetos lip balm” – a balm of Cheetos flavored?
No matter how good of a marketer and salesman you are. If you don’t have the right product, your startup will fail. Period. This is why testing with Minimum Viable Product (MVP) is so important today.
(ii) Not having a good team
Your growth will only be as good as your team. If you don’t have the right team of experts and professionals to take your vision to the next level, your venture will fail.
Take an example of any successful startup. You will find a team working behind it—NOT an individual.
So, aside from building a perfect product, your focus should be equally divided to building a good team who is not only technically proficient but also share the same vision, goals,and aspirations.
(iii) Rushing to VCs
Don’t be one of those who build a $10 million worth business by investing $8 million in the capital.
Unless there’s a definite need, stop chasing the Venture Capitalists to raise incessantly higher capital. Be self-sufficient as much as possible. Don’t lose control of your management for sake of some money.
Your startup will grow much better without the pressure from your VCs to show them revenue and profits.
Meaning, don’t blindly chase the VCs just because everyone else is doing that. Unless there’s a big need and no alternatives are available, you’re better off away from them.
(iV) Not marketing and branding
In this ultra-competitive market, it’s imperative that you spend a large part of your resources on marketing and branding purpose.
Right from the go, you must get extremely serious about SEO, social media, email marketing, and PPC. You must devise and deploy the right strategies to engage with your target audience.
Also, you must invest in your brand name (and not exactly on your product itself) to enhance its value and recognition.
(v) Not being passionate enough
Entrepreneurship isn’t about the money and “cool” that those outrageously stupid posts on Instagram suggest. It’s about helping communities. It’s about making lives better.
Your startup must have a purpose—it must solve a unique problem that people want to be solved.
Sadly, that’s not how things look today. Majority of startups exist just for the sake. People are launching new companies because they think it’s cool and that everyone else is doing it. They aren’t focused on solving the problems; their focus lies on their individual ambitions for money, fame, bigger house and all the luxuries.
This is one of the reasons why 90 percent of all the startups fail. If you’re not passionate about your idea and venture, it’s very unlikely that you will be a part of the remaining 10 percent.