The reality is that most startups fail. In the last few years, I’ve consulted or mentored more than 500 startups. Here is a summary of the recurring problems I have seen in the flawed startups to avoid to maximize your odds of success:
A small or unscalable idea. Investors tend to have bias against ideas that throw out the largest nets possible in terms of potential customers. They would much rather back the next Google, whose product appeals to everyone and anyone, than a small niche business that only appeals to a very narrow market.
Wrong market positioning. Often times, entrepreneurs launch businesses they think are good ideas, but they never took the time to properly research the market. As an example, investors don’t want to back the 10th startup in a space, they would much rather back one of the first.
Related: To Avoid Common Startup Ailments, Try These Preventative Measures
No go-to-market-strategy. Entrepreneurs are typically so focused on building their product, that they don’t think far enough ahead to their go-to-market strategy, and how that will help them to achieve a proof-of-concept to attract growth capital.
No focus. It is hard enough to launch one business, yet alone try to launch multiple businesses at the same time. Don’t be a jack-of-all-trades — you’ll end up being a master-of-none.
Know when to cut losses. If you are trying to paddle upstream, no matter how hard you paddle, the current is going to take you backwards. Entrepreneurs need to know when a pivot is required, while there is still enough capital in the bank and enough time to implement the changes.
No passion or persistence. If an entrepreneur does not exude passion about their product, they will never love their startup enough to get through the good times and the bad. You need to have a persistent mindset that regardless what hurdles get thrown your way, you are going to figure out a way through them.
Wrong or incomplete leadership. Never try to put a Fortune 500 team inside a startup, because they don’t typically think like startups. Investors do not want to back a person, they want to back a complete team — in case you get hit by a bus.
Read more: http://www.entrepreneur.com/article/231600#ixzz2tqBMhMty
Find out more about Wealth Online: http://www.wealthonline.com.au/
Image: Shuttershock
