Managing a business is difficult, but launching a startup is even more challenging. Research shows that 90% of startup businesses fail in their first year. And the reason? Illumination Consulting, a U.S.-based business consulting and digital marketing firm, identified the common mistakes startups make that lead to their failure. Here are the top five.
Building Something Nobody Wants
Entreprenuers are problem solvers. They have been solving problems for ages, constantly looking for needs, and making millions in doing so. That should be obvious, right? But many of today’s entrepreneurs are missing the whole point, building something nobody wants. It is important to remember that one of the keys to business success today is solving age old problems with 10x or 20x improved solution.
Being a startup means being small and agile and having a high rate of innovation and growth. Given this, you need new hires who understand where your business at and are willing to grow with your business. Because, often times, they will have to work beyond their job description.
“One thing I have learned building Grand St. is the value of intense focus. Trying to complete only a few things each week means doing an excellent job on all of them…” said co-founder Amanda Peyton.
A business which lacks focus is more likely to struggle for survival, lose investors’ interest, lose it market, and miss out on the opportunity to capitalize on its niche.
Failing to Execute Sales and Marketing
A good product is only as successful as its sales and marketing execution.
Sales and marketing strategies are the backbone of any business and, therefore, must be planned thoroughly and executed flawlessly.
Not Having the Right Cofounders
Going solo is appealing, but really, many heads are always better than one. Having a team distributes the stress, helps you see issues from different perspectives, and mitigates your risks.
But, of course, you don’t need just any cofounders. You need cofounders who share your vision, as passionate as you do, and are willing to put their money, time and effort in the business. Most important, you need co-founders you enjoy working with.