Startup businesses are not for those who are easily perturbed because it could frustrate the founder initially if the right attitude is not put in place.
Let’s consider Company A, a Tech Institute owned by Gabriel Watt.
Tech is the new oil, so, everyone dabbles into it. So, it’s the case for Gabriel. He invested millions of dollars into this business.
Half of his income covers the physical adornment of the workplace. This Company started with 20 staff. In fact, each of the staff are placed on a meagre salary scale with the target of making a profit for the company
After about one and a half years, some of the staff complained about the traditional modus operandi of the company and the intellectual drainage they suffered from.
Gabriel, the founder, decides to increase their salaries. Unfortunately, the increase led to a loss for the company and he had to lay off some of his staff.
Two years later, the company folded up.
Why was Gabriel frustrated?
Why was the company at a loss?
Instead of the above, the questions every startup must ask before establishing a company are:
What’s the purpose of this startup?
What problem do I want to solve?
Whose (target audience) problem do I solve?
How can I advance my goal? And many more.
A clear why would sustain a startup business but lack of it makes the business crumble in the long run.
When starting a business, some mistakes would surface but they can be avoided.
Recently, a statistic according to the Bureau of Labour suggests that only 80% of businesses survive after one year. Hence, the new startup founder must avoid the following mistakes to increase the chance of productivity.
1. Failure to analyse your target market and audience: The consequences of this are the wrong business model, marketing to the wrong consumer base, and poor competitiveness.
Essentially, early-stage startups should give time to researching the target market and validating their target audience before production.
2. Launching too early: Before launching a product, you should ask yourself these: Is there a market for this product? Are you ready to market it? If your sincere response is NO! Then, don’t launch your product yet. Because if you do, you’re likely to have recurrent errors, poor user experience, and poor user retention rate.
However, it is not great to launch late, rather, you can balance your timing by creating a service with minimalistic features and concentrating on a specific niche and geographical location. It requires less financial labour and demand and you can develop a quality solution fast.
3. Not being user-centric: The essence of researching your target audience is to meet their needs, but if you ignore that, you will only create problems like user dissatisfaction, poor retention, and low usage.
To prevent this, a startup can have a pre-launch of surveys about your product and timely incorporation of users’ feedback at all post-developmental stages.
4. Ignoring external assistance: For startup founders, you cannot establish your business based on your instincts alone. Why? You will be prone to burnout, poor growth, easily avoidable mistakes, and unavailable business models.
So, for the eternal survival of your business, mentors are a good and vital source of guidance for startup founders as they help provide experiential advice for growth and productivity.
5. Disregarding “hidden” factors: Hidden factors are cost-influencing properties that cannot be easily observable and affect the overall price of developing and maintaining a product. For example, you cannot easily estimate maintenance cost as it varies with the development team, the tech stack, and other factors. Marketing updates are additional costs to maintenance costs.
Ignoring these hidden factors may result in higher financial stress, poor marketing plans, unscheduled downtime, and dissatisfied investors.
You should consider each of these mistakes to avoid folding up your business in no time.
Gabriel Watt, the founder of Company A above might still have his company intact if the following tips were implemented:
● Have a reliable partner
● Have a marketing plan
● Have a marketing strategy
● Intelligently interview prospective employees
● Adopt a reputable monetization model.
● Concentrate on the users and not the profit.