Entrepreneurs fear failure. It’s one of the most genuine concerns they ever raised. You see, you can’t spend 6 years building a nuclear reactor, only for it to backfire during the launch day. You must fear losing time even more than money.
Sometimes when startups fail, it’s just because they decided to fail. I don’t believe in failing. Can you define failure? You can say something like “I didn’t meet my goals, I failed.” or “I don’t have any money, I failed.” As far as cliches are concerned, call a spade a spade. Don’t associate bankruptcy to failure. These are 2 different things. Failure, like success, only occurs in one’s mind. It depends on your definition.
Well, I got it.
Why do most startups fail?
Statista did a good job coming up with top reasons start-ups fail. I’ll explain some of them.
From intuition, I can tell if a business will fail or succeed. Are you a victim of any of these characteristics? Chances are your business will topple over like a poorly launched rocket.
Pumping money with no plan to spend: Wechat is a good example. They had all the office space. The right CEO, the right investors, the right gurus and so on.
It was overvalued, more than eBay, and other big companies combined. It came as a shiny object to investors. Something happened. Why? There was a lot of cash flow, without concrete channels to manage and multiply that money. From your daily plan, you know a few thousand dollars are stressful without a clear plan. What about billions?
To resolve this, have a 100 year business plan. Have a small, medium, and large company financial plans. Give room for emergencies, unplanned calamities, and expansion.
Focusing on more than one channel: Most start-ups fear missing out. They want to do podcasts, facebook, youtube, direct mail, etc. They fear missing out on the traffic potential of various channels. This doesn;t end well.
In reality, you only need one channel. A media you’ve got knowledge on. It doesn’t matter. Your customers are everywhere. There is no right and wrong way to reach them.
Dropbox, for example, launched successfully through a video sales letter. Mike Dublin of Dollar Shave club also used this method.
It doesn’t matter if you call it a product-launch or a go-to market strategy. You need:
- A scalable strategy.
- Get attention with a good Advertisement.
- Get shares with a good product.
- Go viral.
Stupid products aka no market need: You need products that sell. Don’t sell virus-making software. Don’t make an app that goes against industry trends, especially behaviours that were consistent for decades.
Make systems, apps and software that:
- Make people money. For example: Upwork
- Save people money/time. For example WordPress.
- Help people survive, enjoy life, live longer. For example: Exercise AI
- Free people from fear, pain and danger. For Example: Weather Forecast, Posture Corrector, Kid Investment.
- Sexual Companionship. For example...you know them.
- Comfortable Living Conditions: For example: Autodesk, Architecture, Killing Pests, Juice Makers, Logitech, Gaming.
- To be winning, superior. For example: SEO intelligence software.
- Care and Protection of loved ones. For example: Software helping children cross roads.
- Social Approval. For example: Review Sites.
There are many proven appeals. These appeals easily blend with genius marketing. Advertising can’t help boring products.
Bad People: Probably the best reason why startups fail. You’ve got people who don’t know what they’re doing. Or worse, they don’t like what they’re doing. Because of this, things move slow. They spend a lot of time learning, making mistakes, testing, and implementing. By the time capital is exhausted, there are no real results. Bootstrapping isn’t possible anymore.
The solution? Hire people who are greater than you.
Poor Marketing: Most start-ups go to the market saying, “Uh! I’m awesome possum.” “Don’t you see I have a nice name? We even have a nice office.” “Buy my stuff.”
Some even use a lot of jargon. I see a lot of “end-to-end engineering solutions” on start-up websites. You can’t excite customers with this language. CTOs could be excited. But the customers are bored. No sale is made. And because no sale is made, businesses fail.
Being Delusional: Guru’s, business coaches have probably lied to you. I was also lied to. They’re good at making you feel like you can conquer the world. Entrepreneurs then set goals they can’t achieve. In other words, they have no capacity to implement.
Time for reality check. Look at the success rate of people who are where you want to be. How long did it take them to reach there? What resources did they have? Evaluate your business and goals with a lot of critical thinking.
Lacked right foundation: Without counsel, plans go wrong. But with the right advisors, things go right. Get this fact right. Only people will take you from where you are to where you want to be. God works through people. Your banker, your advertising guru, your influencer, your employees. Trust and listen to them.
Enough of other people. What about you? Chances are, if you’re great, the whole business will be great. But with a blind leader, the whole startup will be led into an abyss.
Change yourself with these traits.
Characteristics Of Entrepreneurship
Accept No Excuses: You see, anyone can come up with a reason for not being successful. I’m from a third world country. I'm an introvert. I don’t have capital. I fear tax. Listen. The world doesn’t care. There are several people who were in worse situations than you. And they made big things happen.
We can’t just swap our fingers and expect things to run smoothly. This isn’t black science.
The best antidote is how. How can I get capital? How can I pay taxes? Etc.
No Complaining: I’ve seen bosses whining about the government. Trying to change things beyond his control. Expect nothing from others and you won’t be disappointed. Instead, change yourself. Don't try to change the government, taxes, the school, the economy, high gas prices, and other people.
Self-discipline: Refers to doing what needs to be done, whether you feel like doing it or not. If you’re self disciplined, you’re free. If you’re not disciplined, you are a slave to your emotions. If you’re not self-disciplined 6 figures is out of reach.
Strong Mindset: Have big goals and know you can do it. Compare yourself to people who did big things, making your goal look smaller. Think solutions not problems. Surround yourself with 5 rich people. And guess what? You’ll be the 6th.
Have The Right Knowledge: Master your craft. Establish departments, put people who have mastered their craft. Know the market. Understand the competition. Ask for another book, another seminar, another course etc.
Set Goals: You’d be surprised most start-ups have no goals. Instead, they have complex visions and philosophies employees can’t understand. If you don’t have a goal, how do you know where you’re going? How do you know what to do?
It’s very simple. If I want to make $1,000,000. SMART Goals, it’s simple. Sell $1 product to 1 million people. Or sell a $10 product to 100k people. Or sell a $100 product to 10k people and so on. The smaller the number, the harder it is to make the first sale, the easier it is to manage clients.
Do the hard things and nail your goals.
Just Good Marketing: A good marketer will do self-promotion. She will position the business as an expert. She tells stories, and she’s obsessed with numbers.
Laser-Beam Focus: CEO’s try to run several businesses at once. Serial entrepreneurship doesn’t work that way. Focus on one business. Make it successful. Make it work independent of you. Then build another. Benefit from the power of one.
You’ll lose everything trying to do anything. Avoid shiny objects and distractions.
Persistence: Do work everyday even if you are not seeing results. Successful CEOs work 70-110 hours a week. You don’t have a right to leave your business whenever you feel like. It’s hard at first, but you have to get used to being uncomfortable.
Reverse engineering: You need to be an FBI especially with the industry leaders. Learn best practices. Copy everything good. Do a detailed competitor research. You’ll learn a lot. Study their funnels, their offers, their structure, their roles, their products, study everything. It’s the only way someone with no experience can get experience fast.
Track Results AKA KPIs: It helps to track your progress. What goals did you set? Are you hitting them? Review work and results every week, every month, quarter, semi-annually. In Japanese, it’s known as Naikan, or self-reflection. If you aren’t hitting your key performance indicators, you'll know you messed up. You can audit yourself or call an expert.
I’ve fallen and I can’t get up
I understand there are people who still do everything they’re told. But they end up with no results. It’s a bias. Youtube is filled with documentaries of success. And not failures.
To be honest, reasons for failing can be easily seen and corrected. You could do these tips with poor execution. Poor resources, bad customers and so on.
The good news is you learn a lot about your business, stress management, etc. You’re more likely to succeed if you try something related.
When you fall you wake up.
In conclusion, I’m a fan of an all-round person. Don’t be a workaholic and forget your health. We need your bright eyes. Your healthy back. Your good mind. Have good food, sleep, and exercise. After all 50% of what we achieve isn’t because of us. Some say 80%.
Maybe a supreme being, good market conditions, opportunities, fortuness and so on.
If you took notes, you won’t run your business the way you were doing before.
Wishing you a successful startup
Your Second Master,
Direct Response Copywriting For Software.