During our work we have had a chance to talk with many startup owners from a great deal of different branches. Thanks to these conversations we were able to discover a few universal rules that make the startups fail. One of our main goals is to share our knowledge, so here you go – 6 tips on how to avoid startup failure by The Masters.
#1 Choosing a co-founder:
The earliest stage of each project is the moment when the worst mistakes can be made, and choosing a wrong co-founder is probably one of the most serious errors possible. It is extremely hard to make a good startup when you are alone – having an experienced co-founder can change a lot. But be aware, it is not that easy to find a right person – hiring someone random can cause more harm than good. Many promising projects failed because of conflict between founders – you may have a different vision about the product, money, future goals or a way to reach them - so it is very important to find a person whose vision is similar to yours and who you can communicate with in order to overcome hardships that are going to appear. Sharing the company with other founders can also cause problems – you may found it hard to distribute shares or miss the best moment to do it. Another important thing is your future partner’s knowledge. When you work on an IT-connected startup, programming skills are essential and either you or your partner should have them. It may sound obvious, but believe us - it is not. We met a lot of IT startups wannabes without any actual IT knowledge. So be cautious… and choose your partner in crime well.
... you should definitely be sure about your partner in crime.
#2 Bad location
People from the startup field tend to perceive world as a global village. Many of them think it does not matter whether you start your company in Thailand beach or Silicon Valley. . But it’s a lie, guys. Even if your goal is to become a worldwide startup, your first location is a very important thing. You definitely should spend some time on thinking about it and your decision should be based on your target customers, local law, tax restrictions and even on startup community. In future, a bad location can seriously slow you down – you will have to spend a lot of time &money on delivery, taxes, searching for experienced people etc.
#3 No customers, no users
It is very important to have your future customer in mind, even if your startup is not realised yet. One of the first questions that we ask our potential customers is “Who will be using this app? The most popular answer is“Everyone!”. But creating an app without a vision of the future user is impossible - even if you are trying to make another Facebook you need to choose your target group and fit your app in the market. Try to imagine how your target user will use your app, what are the best solutions for them and what do they really need. And even when you create a consistent profile of target customer, remember that it is rather your belief than real data. Customers will vote with they wallets - if your app is worth paying for, they will pay; if not, will leave you. Hence, the accurate predictions and obtaining knowledge of their needs is crucial.
#4 No one needs your products
To be honest…there is no thing like “startup generator”. It will not always be a good idea when you mix, for example, shared economy with… anything. This is a very popular trend these days, everyone want to create next Uber but sometimes it just will not work. A better strategy is finding a problem that you have to deal with and a way to fix it – there is a huge chance that a lot of the people around the world will have the same problems and will look for solutions. And it does not matter is it a problem with lead generation or just with changing a TV channel without having to move from the couch. If your first idea is not working, don’t worry. Many successful businesses reached their current position because of many pivots – maybe it is also a way for you? If you are interested in this topic, you should read “The Lean Startup” by Eric Ries, you will find a lot of useful knowledge there.
Try to separate facts from acts of faith!
5# Bad launching time
“There is always a good time for startup” – it is another lie. When you want to launch your product, you have to find the right time for it – not too early, and not too late. If you release it too early, your product may not fit in the market, or you may launch an unfinished product lacking necessary features. If you release it too late, your competitors may be faster; they can even be fast enough to launch a product very similar to yours but better.... So when is the best moment? Of course, it is hard to say because it depends on the product, but from our experience, the best time is right after making an MVP and building a proto-team.
“There is always a good time for startup” - it’s another lie.
6# Unskilled programmer
In startups, as in any business, experienced staff is extremely important Incompetent programmer can costs you a lot, even if you do not have to pay him too much. The whole project relies on programmers skills and therefore, it takes more money and more time if programmers are unskilled. Delays in developing can actually make you miss your chance to launch the project at the best time. We know a few examples of projects that were never ended because of the delays caused by incompetent employers – the competitors were faster. Just imagine the situation in which all the other obstacles are overcomed – customers are waiting impatiently while your development team is working on which you think will be the hit… and your software is just not working. You can’t let it happen.