5 tips to avoid startup failures
Updated: Nov 26, 2021
Anyone can start a business, but only a few succeed.
A recent study by CB Insights revealed the following to be the top reasons why startups fail:
No market need was the most common reason, but I question this - Was there really no market need, or rather was it that the ‘assumed’ target consumers did not resonate with the brand to have a need for the offering?
Take a look around at all the products you have bought and you’ll be surprised by how many of them you don’t actually need! Your purchases are the result of brands that have successfully created a philosophy to make you believe that you need their products or services, not only to function, but to live well and be connected to a community.
1. Testing to ascertain if your business concept is a good fit for your target market is crucial.
Quite often a business starts up from one person’s need to solve a problem they experience, who makes the assumption that it’s a problem that everyone else also has. Or they have an innovation that's suitable for a certain market, but they don't fall into the demographic to fully understand how their target consumers are receptive to their marketing. And through a lot of hard work and financial investment, these blind assumptions develop from an enthusiastic idea, to full scale production - and result in minimal sales. Why? Because our assumptions are generally wrong!
2. Don’t launch on rocky foundations. Slow and steady wins the race!
Businesses are often launched with the first focus being on sales, and little research being carried out on the brand’s value proposition, and it’s market size. I also witness ambitious entrepreneurs ignoring the product adoption curve.
Entrepreneurs themselves tend to be early adopter types so they dismiss that we as humans are programmed to stay in our comfort zones, and we will not naturally change our habits overnight. More-so, people tend to only think about changing something after a crisis hits e.g. the pandemic that stopped us all in our tracks, or after going to the Doctors to seek remedies for prevailing health problems - it’s only when we hit these real pain points that we will seek to take action.
3. Nail your niche. If you try to speak to everyone, you resonate with no one.
For the large majority of startups, new product adoption requires you to have patience with how you grow your business. First, develop concepts that appeal to niche groups of people, and use this phase to fully test, learn, and adapt your innovation continuously before you think about securing the resources to scale up and enter bigger markets. It's important at the start to establish the reasons why different sets of customers buy from you, to then decide on a growth strategy for your business.
This is why I like testing on digital marketing platforms. For a small budget you can run multiple campaigns to test copy, images, and different target audiences, to determine which variables receive the most interest and engagement.
4. Never underestimate the value that well-tested design and content can offer
99.99% of consumers will buy based on your brand story and packaging, or your website design, before they use your products or services. So it’s always best to test many different communication iterations before you go ahead with an official launch.
5. Consumers are inspired by a desired lifestyle to buy new things.
Many new brands have the challenge of influencing a new culture in order to sell their products and services, and disrupt the industry. For example, if you are launching a new health food brand, there's generally an educational piece of work to do for people to clearly understand the importance of the product's nutritional values and why these are important for their lifestyle. But how much can you really achieve by doing this alone on a small budget, which is most often the case for a startup? You will gain much more momentum in finding other lifestyle brands to collaborate with on broader themed marketing initiatives.
Creative collaboration is where the magic happens!
So once you have reached the point of testing where you have fully validated who your target consumer is, and you have a clear idea on how you can form an active community, the next step is to envision a desired lifestyle - what’s their fashion style, eating habits, political views, what music do they listen to? etc. Imagine your brand to be a movie - what’s the script and who are the characters in it? This is the exciting part where you can be less scientific, and more imaginative to build brand credibility from stories that evoke emotion.
Through various creative forms of lifestyle marketing, you can achieve many cost efficiencies, to influence positive change in the way consumers think, feel, and act. More ideas on this coming soon, so watch this space!
Want to start testing your brand design and messaging? Get in touch and I’ll happily recommend a digital 'test' campaign plan to give your business concept the biggest chance for success.
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