Launching a new product or idea can be exciting, and undoubtedly most entrepreneurs have done at least some research into what works, and what doesn’t in their given industry. Unfortunately, being excited about a new business can make it easy to lose focus on some of the most important aspects of success.
Unfortunately, when entrepreneurs are excited about their new project or business, they often lose touch with reality for a few moments. While you may think you have the best idea anyone has ever come up, the reality is that there are seven billion people on the planet, and there’s a good chance that more than a few of them have had the same idea.
Startups typically bleed money until they ship their first (or second) product. Service-based startups have to spend money setting themselves up to handle a growing customer base. In the end, the difference between success and failure can be determined by each and every decision you make early on. Many times, startups make these same decisions – and they’re often mistakes
Failure to Research the Idea Fully
Steve Jobs often said that Apple engineers built the products they would want to use themselves. This worked out for Apple, but this same philosophy could be limiting your potential as a business. Apple has the capital to hire on a large team of engineers, the real-world market data gathered from its years in the industry selling similar products to consumers, and it had more than its fair share of failures over the years.
Startups don’t have the luxury to head into an industry without doing their due diligence. Find out who your real users will be and get their opinions on your product and/or service. Offer a wide-reaching beta that allows you to get feedback from an interested community early and often. This research will help you develop a product that not only you would use, but your customers as well.
Not Knowing When to Move On
A large percentage of startups fail early into their existence. This happens all the time, and many entrepreneurs will tell you that failure is an important part of any company’s success story. What separates successful businesses from absolute failures? The ability to pivot when the need for change is apparent.
Sometimes, even the best laid plans are doomed to a life on the back burner. Your startup’s followers may find a specific aspect of your business more interesting than the component you went into it believing would be key. Knowing when to shift your focus and evolve your strategy to meet this new focus is critical to long-term success.
Likewise, it’s important not to give up too soon. If companies like Apple or Microsoft had given up when times were tough, the world would be a very different place today.
Overestimating Growth
In a perfect world, everyone’s business would take off after a few short months of effort by the founders. Money would come pouring in from all sides and we’d all have ten story offices with entire floors dedicated to foosball and gourmet catering for the staff.
Reality is very different. For every Instagram success story, there are a thousand examples of slow growth and even failure. When projecting your business potential over the first five years, be realistic. Investors hear overanxious entrepreneurs pitch them ideas all day long while proclaiming that their company is headed up faster than a SpaceX rocket. What really catches their attention is a realistic expectation set against a solid product that solves a real-world issue.
Even service-based startups should consider the possibility that clients may be few and far between at first. Your business plan should change often during the first five years, and so should how quickly – or slowly – you scale as a result.
The division between success and failure often rests on realistic expectations and adaptable approaches to the business. If you have a startup – or work in one – what are common mistakes you see or have experienced?