Post by Trade facilitator on Jun 17, 2021 21:45:44 GMT 1
Over the ages they have been ringing it in our ears that about 90% of startups usually fail within the first five years.
Truly as an entrepreneur, I have had a good share of failure of projects; these failures I must admit were due mainly to stupid mistakes and over assumption.
Through all these I have been able to fairly understand why a few startups succeed; and somehow why majority of startups fail.
The truth is that every CEO of a failed startup will tell you that he or she knows the reason for the failure. Most of them point accusing fingers on other factors apart from themselves.
But as harsh and real these statistics are, ten out of one hundred failing, you don’t need to get discouraged, rather you need to work smarter and harder in order to conquer and succeed.
Before we continue, let us look at what really is a startup.
For a long time, investors have treated startups as small businesses. But there is a great conceptual and organizational difference between startup, small business, and a large corporation.
According the startup guru, Steve Blank, a startup is a “temporary organization designed to search for a repeatable and scalable business model”.
Small businesses operate according to a fixed business model. They are privately owned corporations, partnerships, or sole proprietorships which have few employees and have revenues that are less than the revenue of a normal or regular sized business or corporation.
For a startup founder, this concept means the following three main functions:
To provide a vision of a product with a set of characteristics
Create a series of sceneries of the business model regarding customers, distributors, and finance of the company
Understand whether the model is a right one based on customer behavior, as your model predicts.
What are then the characteristics of those startups that succeed?
There are many characteristics or features of startups that are successful, but I want us to discuss the most significant of them all first.
The product is usually perfect for the market:
According to a report from Fortune, those startups that fail make products no one wants to buy. Statistics have it that about 42% of startups that failed, failed because there was no demand or need for their products; this is the single biggest reason for their failure.
This brings us to the basic fact, if you want to spend your time and possibly money to create a product, be sure to create the right product for the right people.
The entrepreneur does not ignore anything:
If you take your time to analyze the reasons or factors of the failure of many startups, you will discover relegation of business processes to the background.
The Chief Executive Officer (CEO), the Chief Technical Officer (CTO), Chief Marketing Officer (CMO) want to stick to their major tasks , they fail to realize that they must follow the business process that link all their activities together to achieve their business goals.
They should not get distracted by mundane things in the business environment. A business process is a collection of linked actions that lead to the success of the organization’s goals.
The company grows fast:
Great and rapid growth is what every entrepreneur craves for. It shows that the product is hot and demanded in the market.
If you don’t grow fast enough you will run out of cash, and that will ultimately lead to premature shutdown of business operations. Cash crunch is one of the major reasons for close down of startups, you know that cash is the lifeblood of any business whether startup or big corporations.
The team knows how to recover fast:
Every startup is made up of a team, a group of people; the more versatile they are the better their chances of succeeding.
Members of a startup should be able to do so many things to hold the business up during difficult periods.
Shift industries, rebrand, or even start all over again in case of shutdown.
Startups without a sole founder tend to survive more than those with sole founders.
Having a co-founder creates a partnership. A co-founder may have some skills that you may not possess.
Startup endeavors are hot business models these days; we of this forum will bring to you a comprehensive write on how to join this band wagon and make a success of it.
Stay with us.
Truly as an entrepreneur, I have had a good share of failure of projects; these failures I must admit were due mainly to stupid mistakes and over assumption.
Through all these I have been able to fairly understand why a few startups succeed; and somehow why majority of startups fail.
The truth is that every CEO of a failed startup will tell you that he or she knows the reason for the failure. Most of them point accusing fingers on other factors apart from themselves.
But as harsh and real these statistics are, ten out of one hundred failing, you don’t need to get discouraged, rather you need to work smarter and harder in order to conquer and succeed.
Before we continue, let us look at what really is a startup.
For a long time, investors have treated startups as small businesses. But there is a great conceptual and organizational difference between startup, small business, and a large corporation.
According the startup guru, Steve Blank, a startup is a “temporary organization designed to search for a repeatable and scalable business model”.
Small businesses operate according to a fixed business model. They are privately owned corporations, partnerships, or sole proprietorships which have few employees and have revenues that are less than the revenue of a normal or regular sized business or corporation.
For a startup founder, this concept means the following three main functions:
To provide a vision of a product with a set of characteristics
Create a series of sceneries of the business model regarding customers, distributors, and finance of the company
Understand whether the model is a right one based on customer behavior, as your model predicts.
What are then the characteristics of those startups that succeed?
There are many characteristics or features of startups that are successful, but I want us to discuss the most significant of them all first.
The product is usually perfect for the market:
According to a report from Fortune, those startups that fail make products no one wants to buy. Statistics have it that about 42% of startups that failed, failed because there was no demand or need for their products; this is the single biggest reason for their failure.
This brings us to the basic fact, if you want to spend your time and possibly money to create a product, be sure to create the right product for the right people.
The entrepreneur does not ignore anything:
If you take your time to analyze the reasons or factors of the failure of many startups, you will discover relegation of business processes to the background.
The Chief Executive Officer (CEO), the Chief Technical Officer (CTO), Chief Marketing Officer (CMO) want to stick to their major tasks , they fail to realize that they must follow the business process that link all their activities together to achieve their business goals.
They should not get distracted by mundane things in the business environment. A business process is a collection of linked actions that lead to the success of the organization’s goals.
The company grows fast:
Great and rapid growth is what every entrepreneur craves for. It shows that the product is hot and demanded in the market.
If you don’t grow fast enough you will run out of cash, and that will ultimately lead to premature shutdown of business operations. Cash crunch is one of the major reasons for close down of startups, you know that cash is the lifeblood of any business whether startup or big corporations.
The team knows how to recover fast:
Every startup is made up of a team, a group of people; the more versatile they are the better their chances of succeeding.
Members of a startup should be able to do so many things to hold the business up during difficult periods.
Shift industries, rebrand, or even start all over again in case of shutdown.
Startups without a sole founder tend to survive more than those with sole founders.
Having a co-founder creates a partnership. A co-founder may have some skills that you may not possess.
Startup endeavors are hot business models these days; we of this forum will bring to you a comprehensive write on how to join this band wagon and make a success of it.
Stay with us.
