A Startup Is War. Here’s How to Win It

What startuppers might not be aware of: a developer’s perspective

Rick Mess       |       May 24, 2020

There are fundamental reasons why 90 percent of business startups fail. You can avoid making the most common mistakes by getting a better idea of the things that are normally only known to developers. Outcrowd develops websites and mobile apps, so we have a long experience of working with startups. We are happy to share some of our observations because this knowledge will increase your chances of success — and thus also increase ours.

Below, we have detailed the main reasons why startups fail. They are like landmines waiting to explode at any moment. Knowing where they are planted will help you avoid them, and your chances will grow in geometrical progression. This knowledge is your path to victory.

1. Insignificant target audience

It’s a frag mine. Your idea may well be revolutionary. Even the niche you’re planning to take has nothing similar to offer, there’s little to no competition. But before taking the world by storm, take a moment to think: maybe there’s a good explanation for why this particular niche is unoccupied? As a rule, a niche is empty not because nobody has come up with the idea before but because the demand is too low. There’s no point wasting effort to cut a path through the woods if no one ever goes there. Especially if there’s already a road nearby.

Failure is a result of not taking the time and effort to study and analyze the market. People don’t want to believe that their idea will be unwanted. At the end of the day, they will be very disappointed.

Solution:

We don’t mean the wheel. It’s about finding ways to present your idea, and these are countless. Think of literature or cinema: all the possible plotlines have long been discovered, but the number of new books and movies keeps growing.

2. Ignoring market research

It’s a timebomb. In our experience, many customers come unprepared. They have a vague idea of the current market situation and are only focused on their own project. However, researching the marketplace, target audience, and competition must be the second step after having the idea in the first place. It’s a foundation of your future building, which will collapse without it. You can’t have a proper business model without market research.

Obviously, we help our customers perform market analysis and collect the relevant data. But thorough and comprehensive analysis performed by the customer is a great way of making sure we start moving in the right direction.

Solution:

3. Not knowing your audience

Not having a profile of your prospective customer is unexploded ordinance just waiting for you to step on it. And it’s not just another marketing study from Paragraph 2. It’s not about things like gender, age, or earning bracket. It’s more about behavioral factors that will lead your customer to buy your product. Call it psychological profiling. Do you do it? You need several profiles, about three or four. Knowing your customer’s psychology will help you find the specific triggers which will motivate them to try your product.

Another frequent mistake is narrowing your target audience. For instance, don’t assume that male shaving kits are only bought by men. Women often buy them as presents. Understanding this will help you expand your communication channels and reach a wider audience.

By knowing your customers you can also identify more channels for attracting them.

Solution:

4. Overcomplicated and extensive project

This is a boobytrap that will tangle and blow up an overly complex and extensive startup. Some startuppers deliberately make their project’s life more difficult. They keep adding “new and improved” features in the mistaken belief that this constitutes progress. But it’s much better to start out small and make it good than become mired in complexities right off the bat. Note that all the best global startups started out as simple experiments. A minimal set of features will enable your product to adapt to the market much faster and easier.

Solution:

5. No testing

The lack of testing is a landmine that will blow up any startup. To understand whether your product or solution will be in demand, you must test it. We often encounter inexperienced startuppers who either haven’t given any thought to testing or try to put it off for later.

To test your product, create and launch a Minimum Viable Product (MVP). The testing will show you the right way to go, as well as which ideas you’re better off without. MVP saves you time, money, and nerve cells. MVP will not make your idea more primitive, only more compact. It will help you identify the key factors (see Paragraph 4). Using the MVP as a basis, you can expand, develop, and improve your idea whichever way you want. It’s a way of generating feedback from your customers.

Solution:

6. Unrealistic financial estimates

This is an explosive device on a countdown. Once it detonates, your startup will be reduced to ashes. It’s very important to calculate how much funding your project needs at the outset. Draw up a clear plan and follow it religiously — otherwise money will run out at the worst possible moment and your project will stall.

Normally, investment funding for a startup is provided up until a certain stage of the project. Afterward, the cashflow starts slowing down, and the project may not survive to the next stage. Usually, the problem is not so much meager funds as erroneous estimates.

Our company suggests developing your product stage by stage, thus minimizing financial risks. This way, the customers can get a better estimate of their resources and only fund the actively developing part of the cycle.

Solution:

7. Not following the plan

Another explosive device that can cause a lot of grief both for you as a customer and for us as developers. This can seriously damage your startup. You decide to change your plans and inform us during the final stage. For example, you want to add a new feature that requires changing the logistics and design. You refuse to launch the project without this feature. In practice, this is akin to pulling out a card from a house of cards. The trick might not work and you’ll be forced back to square one. Once you’ve moved past the analysis and prototype stages, it is essential to follow the original plan. After you’ve made sure, through testing, that everything is working as it should, you can add more features.

Solution:

8. Being satisfied with minimal growth

Yet another landmine lying in wait for the hapless startupper. Any business needs growth to survive. If aggressive growth is not part of your plan, someone else will quickly take advantage of you, making your business less relevant. You won’t be able to present your startup as a new wave. People often get left behind.

Solution:

9. Being unaware of the current situation

Another mine in startupper’s flowerbed. Getting ahead in the marketplace is like fighting a battle. To succeed in your mission, you need situation awareness. In the market, as in a war, the disposition of forces is constantly changing. Don’t be content with early-stage market research. You must be on the lookout for outside enemies and obstacles and keep an eye on what’s going on the home front, which means constant monitoring of the market. Startup leaders like to get bogged down in details. They get obsessed with their idea and have no interest in strategic growth, researching the competition, or their own target audience. Bombs are going off all around while the soldier is polishing his boots.

Solution:

10. Lack of feedback from developers

This bomb can do huge damage down the road. Fortunately, it’s pretty easy to avoid: all you need to do is constantly stay in touch with the developers. Feedback enables us to develop and improve your product. Keeping in touch provides us with the necessary information and understanding of priorities, while you can be assured that your brainchild is in safe hands, growing and progressing nicely. The child will soon grow up to make all of us proud!

Solution: you guessed it!

Afterword

Startups are for the courageous, the strong-spirited, the ambitious among us. But even the bravest soldier is better off not stepping on landmines. They can and should be avoided or defused by a bomb squad.

May your startup be victorious!

Yours sincerely,

Outcrowd


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