Start-up success is often described as some elusive feat that only a lucky few are able to achieve. In reality, start-up success (or failure) is usually a lot more predictable than you expect.
You’ve probably heard the statistic that 90 percent of start-ups fail, and that’s true.
What you may not have heard is that start-up failure usually boils down to a few common mistakes and mis-steps. Better yet, those mistakes can often be avoided.
If you’re ready to up the ante and accelerate your start-up, or if you’re considering launching a startup, consider these top five mistakes so you can avoid them like the plague.
Rome wasn’t conquered in a day, nor was it conquered by some dude flying solo. Attempting to launch or run a start-up with no help, no advice and no team can be detrimental in a myriad of ways.
For starters (pun intended), you’re much more likely to burn out, give up or quit if you don’t have someone to share the work, the glory and the triumphs with.
Let’s look at the facts: research shows that your start-up is 30 percent more likely to succeed if it has two founders, as opposed to one.
Divide and conquer. Launching with a partner or co-founder is one option for sending your start-up off in the right direction.
But even if you don’t know a suitable founder or if you don’t want to give up a share of your business, you can still seek advice and expertise from outside advisors.
Free business mentoring services, such as SCORE which is sponsored by the SBA, will give you a team of absolutely free, expert business professionals with a wide array of backgrounds to give you advice and resources on running your start-up.
You literally have nothing to lose and everything to gain.
Related Article: Cultivating Entrepreneurship: How Startups Fuel Regional Economies
Okay, I know I told you to divide and conquer and I stand by that. But if you choose the wrong people to be on your team, your business will pay for it.
It’s been said that most business failures boil down to a people issue, not a service issue or money issue.
In a study that was conducted on failed start-ups, the statistics showed that 23 percent of start-up founders attributed their failure to having the wrong team. If that’s not enough to make you rethink your potential partners and employees, I don’t know what is.
Properly vet all potential partners, employees and contractors. Don’t hire someone just to hire someone, and definitely don’t bring someone in because you’re overworked and desperate.
Spending the extra few hours, days or weeks to find a team that truly aligns with your business mission and work ethic will pay off in spades. And when you do decide on the right team, be sure to follow the correct legal protocol for hiring, contracting and partnering.
It’s better to cover your butt from the get-go than deal with a legal battle later on.
There’s this little thing called market research that some (usually floundering) start-ups fail to acknowledge.
According to at least one study, failure to test the market and launching a product or service that no one needs or wants, was cited as the number one reason for start-up failure.
Too many would-be successful start-ups neglect this important aspect of product or service development because they don’t want to hear negative feedback.
They trod on with their business idea, not knowing if the market will actually be receptive or if the idea needs fine tuning.
Test the market. You don’t need to shell out big bucks and employ the help of market research firms or focus groups to test the market and find out if your product or service is viable.
You can begin conducting your own market research by analyzing current trends, sales data and competitor practices. From there, you may survey existing customers or potential customers in your niche to gather insights straight from the source.
The information you gather will help you determine your market segments, success metrics and even give you a feel for what your pricing should be.
The best news is most of this can be done for free using the Internet, your phone and the local library.
How many times have you made a plan and it’s gone exactly as you expected? If you’re being honest, the answer is probably never. So, then why do so many business owners stick to their original business plan so stubbornly despite changing market conditions and consumer demand?
Startups that fail to adapt to changing consumers, technology, innovation and marketing methods are at a major disadvantage to those that are flexible.
Stay flexible. Assuming you have a business plan (even if it’s just a rough plan like the Business Model or Lean Model Canvas), it should be updated and adapted on a regular basis. Your business plan should guide you, not imprison you.
Pay attention to trends in your niche, stay keen on what your competitors are doing, and don’t ignore what your customers are saying. If the time comes for you to adapt or change something, do it sooner rather than later.
If you build it, they will not come. Unless of course you give them a reason to. Too many start-ups are deluded with the idea that if they have a truly awesome/innovative/groundbreaking (insert word of your choice here) business idea that customers and media outlets will be kicking down their door to find out more about it. Wrong, wrong, wrong.
Likewise, even businesses that do have a marketing strategy far too often ignore branding. The grim reality is that products and services have lifecycles, but brands have staying power.
If you fail to brand your start-up from the get go, it could kill your bottom line when one of your products or services reaches the end of it’s lifecycle.
Create a marketing and branding strategy to implement from day one. You could have the best business idea in the world, but if no one knows about it, you’re dead in the water.
Lauren Wilkison, founder of CSC Interactive, an SEO and Digital Marketing agency put it in perspective, “Why do some businesses with subpar or average products get the majority of the market share, while other businesses who provide stellar products struggle to get customers in the door? In one word, marketing.”
If you’ve done your market research, you should already know who your target market is and where they hang out. Create a marketing and branding strategy that speaks to them, measure it, and adapt and revise it when necessary.
Related Article: The It-List: 10 Start-Ups to Watch in 2016
Freeman Lewin, CEO of Gimmee Jimmy’s Cookies, an online company that specializes in fresh baked cookies and corporate gifts offered this advice on running a start-up, “Don’t underestimate the power of your customers. If you find the right customers, treat them right, and find ways to appreciate them, they can become so much more than just customers. They become brand evangelizers and raving fans.”
Linda Koritkoski of POP.co, a platform that helps startups get their business idea online, talked about the journey from becoming a "wantrepreneur" to a real entrepreneur by adding, “Too many ‘wantrepreneurs’ wait to put information public about their idea for the fear that someone will read about the idea and steal it, so they work tirelessly on an idea that isn’t validated and never get it out there. Get the idea out there before you feel ready, because you’ll never be ready.”
Lastly, Joe Speiser, the co-founder of New York City-based media startup LittleThings.com offered up, “To be successful, know your limitations, understand what you’re good at, and where you need help. Hire people that can help improve areas of weakness and that will complement your business.”
Running a start-up isn’t for the faint of heart. And the silver lining is, even if you fail at your first attempts at running a startup, research shows that you have a better chance at succeeding at a future start-up than those who have never failed.
The keys to success really aren’t that hard, after all; do your research, align with the right people, stay consistent and provide more value than your customers expect.
At the end of the day, even if you encounter one of these start-up hurdles, it really isn’t a mistake if you find a way to learn from it.