India as a country is so much obsessed with startups. Maybe that’s the biggest achievement of our countrymen in recent times. From being a country of employment starving youngsters to the youngsters stepping up to create new job opportunities, our youth grew mature. Witnessed a large number of startups in all the sectors, we saw some success and many failures. But the youth of the country is too stubborn to give up. They failed, learned their lessons and moved on pulling up their socks to give it a better shot.
Successful startups give us a lot of revenue, but the failed ones give us the best lessons. Although there can be many different reasons for the fall of various startups, some reasons have repeated themselves many times and must be in our head to avoid. Here is a list of mistakes featuring in multiple ventures…
#1 Deficient Business Model
Despite having a good product or service and passing the debut test, some of the startups fail to spread their wings. The biggest flaw in the business model of many of these ventures seems to be the less analysis of the cost of acquiring a customer(CAC). We can never spend on a single customer more than his lifetime value. It becomes arduous for many of them to decide the right amount of CAC. The better-modelled business would be the one that can give back our CAC as soon as possible.
Also Read: Is your startup a sustainable business?
#2 Lack of Funds
This is common and occurs with almost all the startups. But it doesn’t mean that the lack of fund always leads to the death of venture. When we start, we need to be careful in using our funds as we need to reach to the next level with limited cash flow. So before running out of cash, we have to take the valuation of the venture to a level where even when we have no funds left, we can get secure funding owing to the valuation of the business.
#3 No understanding of Customer’s Brain
Any venture to flourish needs its product to be user-friendly. If our product is not understood or is too complex, users lose interest too soon. So it’s the genuine responsibility of the team to develop products that are easy to use and yet have unique and attractive features to lure its users. Failing this can take us nowhere.
Also Read: Customer Engagement 101
#4 Ignored Competitions
Many entrepreneurs focus on improving their product by adding innovatively new features and strive to make their product a perfect experience for their users. But in the process, they ignore the proceedings of the competitions they have in the market. For a product to be successful, it’s crucial that we have a thorough research of the things our competitors are providing and the feedback of people about them. Our products need to have all the features that are currently the talk of the town.
#5 Ignoring the User Needs
In the quest of creating our heavenly products, we often tend to ignore the needs of the market. We are too focussed adding new features to better our products that we forget to acknowledge the user requirements, and we even end up having a product with awe-inspiring features irrelevant to the users. Thus we spent a hell lot to make a useless product.
#6 Weak Management
For a venture to blossom, we need more than one founders having a knowledge of different fields. A team of like minds is a drawback for a firm. We need different people with varied skills to cover various areas of expertise. An excellent management team leads to better strategies and even better execution. The better the management, the better the staff.
#7 Unplanned Marketing
Having a good product without awareness is of no use. One of the vital components of being the success in any sector is marketing. Making people know why they need your product and how you make their life easier with your product.
Knowledge of the target audience and how to attract them is the base of these marketing strategies. Some startups fail due to the lack of promotion. They have a good product or service, but they ignore the marketing part. Due to this, the reach of the product fails to spread.
Some of them even fail due to early marketing. We all need to match our pace with our users. Any venture moving ahead of, or faster than its users is bound to fail. We need a well planned and perfectly timed promotion to hit the target audience.
#8 Lack of Customer Feedback
As a team just started, we strive hard to make our product the best in the market. We keep on modifying it to be better every tomorrow than the last yesterday. But all these modifications are in vain without the customer feedback. It’s the feedback of users that tell us the things being liked and are useful. Keeping on the modification job without any feedbacks is just burning of money and eventually, leads to the death of the venture.