9/10 Startups Fail – How To Make Yours Part of The Succeeding 10%

Anyone who is even remotely associated with the startup world knows that more startups fail than they do succeed. With each business or startup that fails, one should really go back and see what may have caused things to not work out. Even though there are thousands of success stories to look up to, there are a lot more to learn from the failures.

There can be a myriad of factors resulting in startup failure and here are some of them:

Market Problems

A major reason why companies fail is that they run into the problem of their being little or no market for the product that they have built. Some common issues people run into when it comes to the market is that there isn’t a compelling enough value proposition, the timing may be wrong (being ahead or behind by too many years) and the size of the market just not being significant enough.

Poor Management Team

An incredibly common problem that causes startups to fail is a weak management team. Weak management teams make mistakes in multiple areas. Some of these mistakes include being weak on strategy, poor at executing their ideas or building a team of individuals that aren’t best fit for their positions.

Running Out Of Cash

Another reason that startups often fail is that they simply run out of cash too soon. A key job of the CEO is to understand how much cash is left and whether that will carry the company to a milestone that can lead to a successful financing or bring them to cash flow positive. It isn’t easy having to balance a business and a lack of funds in the startup world.

Product Problems

Another reason that companies fail is that they fail to develop a product that meets the needs of the market. This can either be due to simple execution or it can be a far more strategic problem, which is a failure to achieve product/market fit. Nevertheless, if you can’t build the best possible version of your product, you’re going to be in trouble.

Nowadays, it seems like everyone you know is somehow involved in a startup. However, despite their popularity, many startups struggle to ever take off. While every startup has its own unique challenges, you should definitely try to learn from those who have managed to find success. The bleak truth is that 9/10 startups fail. Here are ways on how to make your startup part of the succeeding 10%.

1. Take Calculated Risks

Every decision has its consequences. Successful startups are able to recognize potential outcomes and accurately calculate risk. Hasty decisions are never a good idea, thus you have to weigh the risks and rewards of every move you make. Rather than being reckless, focus on taking risks that have a good chance of succeeding.

2. Have A Product-Market Fit

Selling a product or service customers actually want is important. The market must be willing and able to pay for what you’re selling. This seems straightforward and obvious, yet many startups struggle with defining their product-market fit.

You may have a product or service that is initially well-received, only to later find out it doesn’t have the level of support you need to be successful. Successful startups know that an initial idea or product concept may need to be adjusted over time. They are continuously testing their assumptions and are willing to change course as needed. The sooner you nail down product-market fit, the better your foundation for success will be.

3. Start With A Small Market

When it comes to successful startups, there is a lot of talk about the importance of having a huge market. It’s true that a startup must eventually reach a large market in order to turn into a large company. However, at the beginning, it’s actually best to start with a small market or super targeted niche.

4. Effective Communication

Communication is a crucial factor of business as well. This is an important characteristic that translates throughout a company. Communication must be effective among employees in a business and between the employees and the customers. If communication is lacking, business will be too.

5. Take Feedback Seriously

Another quality of successful startups is their ability to adjust to feedback. Whether the feedback comes from investors, advisors, mentors or customers, successful startups extract value from feedback to help improve their product, service or business model. Ultimately, it’s a balancing act of knowing when to pivot and when to hold your ground.

Savvy founders form connections with mentors and advisors early on, developing relationships with those who came before them to learn from their mistakes and successes. One of the best ways to make those connections is in co-working spaces. Being surrounded by these types of individuals is a great way to accelerate your business forward.

6. Passionate About Disruption

Successful startups are based on disruptive ideas. More than a buzzword, disruption is changing the status quo in an existing marketplace. The phrase “disruptive technologies” was coined by Harvard Business School professor Clayton Christensen. Disruptive technologies create new markets and value networks that eventually displace more established ones.

Thus, the driving factor of a successful startup is more than someone wanting to be their own boss. Instead, it’s someone envisioning “a new normal” for their target market. It’s that passion that pulls them forward in the face of existing competitors, industry standards and norms.

7. Goal-Oriented

While a business venture may seem like a goal in itself, entering a business requires strategy and planning. Successful businesses are managed using a system of short-term goals that are constantly evaluated and realigned. With such a system, the business and the business owner are able to identify and achieve success. A strategic plan is an important element of any business design.

Managing a business is a difficult, but a rewarding task. To be successful as a startup, you have to achieve some level of success fast. The quickest way to achieve success is to set goals and to crush those goals over time.

Conclusion

Whether a startup will succeed and grow into a long-lasting company is based on a variety of factors. But, in examining the landscape as a whole, it is possible to identify some common characteristics of successful startups. In this post, I shared with you that 9/10 startups will fail and the ways on how to make yours part of the succeeding 10%.