“Startup” is a hip & trending term among millennials. The youths today love the concept of flexibility and being their “own boss.” The chances of earning a profit over a deary paycheque or the chances of adventure in risk’ thoroughly excite them!
Given the worldwide lockdown, the concept of startups has only grown. Sitting at home, sipping on cup of coffee & meeting clients is the new trend. But is having a startup that easy?
What makes or breaks a startup?
Why is it that 90% of startups fail? (Yes, you read right!)
Well, before we dive right into the reasons for the same. First, let’s look into the meaning of startup.
Trust me; you’ll be shocked!
A startup refers to a business that solves a problem to society’s problems in an innovative manner. Let’s look at it from a more simple-minded lens.
The sandwich shop across your home may have started his business only a month ago. But is his business called a startup? No, it’s not.
There are two reasons why it doesn’t qualify as a startup:
- There is nothing new about his business.
- His sandwich isn’t helping in any bigger societal issues.
On the other hand, if your neighbor discovers a drug that could cure a disease like cancer, his business will qualify as a startup. (not to mention the fact that he’ll be a millionaire in just a couple of seconds!)
Startups are a mixture of two “I’s”:
As we can see, our definition of a startup is already changing.
Now, let’s go on to see what the secret ingredient to the success of a startup is:
Million-dollar idea or Million-dollar Marketing?
Well, the whole world thinks your idea must be spot on! It’s true but only half the truth! It’s how you market that idea that matters the most. Your idea doesn’t need to be entirely original, it could also be an innovation of a current trend. It’s not your idea but market penetration that is important. This is because the market dictated the success and failure of your business idea!
Teamwork makes Dreamwork:
The most undervalued secret to success is sharing the load. As simple as it sounds, it can make a ton of a difference on a day-to-day basis. Hiring a few but highly talented experts can release a whole lot of burden from the owner’s shoulders. The owner can focus on the bigger picture rather than the small mundane tasks. That’s how companies grow!
Networking is Key:
Having a solid network with like-minded people will never be harmful to a startup. This way, you can fuel your inspiration and contacts from employees, entrepreneurs, and, most importantly, fund-raisers!
AKA your Road Map to success; plays a crucial role in the success of the business. It’s your business model that displays your vision, values, and the steps been taken to deliver those promises! It helps to garner a reputation.
It’s all about the ROI:
Once you have a bang-on business model, finding an investor won’t be too hard. If you can prove profitability and concrete steps to achieve it.
You won’t need to search for investors; investors will come searching for you.
However, a recipe for disaster can include a gazillion reasons. But here are the top 5:
Most startups fail as they fail to articulate how their product solves a present-day problem. Even if it solves a big problem and the market has no demand, you will be A BIG FAIL! If you produce with no demands, the result will be: just frozen money & heaps of warehouse!
Cash Burn to Heart Burn!
When startups are funded, they tend to get excited with the overflow of money and start spending superfluous on so-called “productive” activities. Over-spending on advertisements, unique features secondary to the business, and other frills can dry up your liquidity. Such cash burn will only lead to stress & a trembling fear of failure!
Focus on Perfect Price Point
It’s not the sweet price point that matters, but your audience. If your customer segment is deep-pocketed, you can get away with a stinkingly high price point. But if your customers idolize affordability, then budget/drugstore should be your go-to pricing strategy!
You might get strangled in a series of complex laws and regulations. If not backed by a lawyer, your startup could land up in a legal mess like suspension of business, fines, or possible imprisonment. Running a startup is no joke!
Not just hard fast stats, but psychology plays a big role! The primary reason for the disaster is the failure to accept criticism, ignoring users’ feedback, and being extremely secretive about the prototype. Criticism and feedback help to sharpen your business idea, so be open and swallow that nasty ego!
Startups look cool yet are much more than that. One has to be vigilant at all times. Persistence, perseverance, and sheer determination are required. Be prepared to shed some blood, sweat, and tears for your business. Be flexible, frugal in spending & keep fuelling your capital!
And don’t worry, the rewards and returns will be much more than the time and money invested. Don’t ever limit yourself! You may be an Elon Musk in the making!