5 Tips to avoid Start-up Failures
Updated: May 29
Anyone can start a business, but only a few succeed.
A study by CB Insights revealed the following to be the top reasons why start-ups 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 products or services?
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 built a philosophy to make you believe that you need their products, not only to function, but to live well, stay connected, and find happiness through belonging to a tribe.
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, who makes the assumption that it’s a problem that everyone else also has. And through a lot of hard work and financial investment, this assumption develops from an enthusiastic idea to full scale production, and results in minimal sales. Why? Because it’s highly likely that our assumptions are wrong!
2. Don’t launch on rocky foundations. Slow and steady wins the race!
Products and services are often launched with the first focus being on sales, and little research being carried out on the brand’s value proposition and who resonates with this. I also witness ambitious entrepreneurs ignoring the product adoption curve.
Entrepreneurs 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 generally only think about changing something after a crisis hits e.g the corona-virus pandemic that has stopped us all in our tracks, or after going to the Doctors to seek remedies for high stress levels, and prevailing health problems - it’s only when we hit pain points like these that we take action to change our lifestyles.
3. Nail your niche. If you try to speak to everyone, you resonate with no one.
For the large majority of start-ups, new product adoption requires you to have patience with how you grow your business. I would advise to start by developing concepts that appeal to niche groups of people you are interested in, or familiar with, and to use this phase to fully test, learn, and adapt continuously before you think about widening this to bigger markets, or securing the resources to scale up. At this point it's important to establish the reasons why different sets of customers buy from you, to then decide on the best strategy for expansion.
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 of these variables achieve the most response.
4. Never underestimate the value that well-tested design and content can bring
99.99% of consumers will buy based on your brand story and packaging or your digital design before they even taste your product, or use your service, so it’s always best to test many different brand communication iterations before you prepare for an official launch.
5. Consumers need to be inspired by a lifestyle in order to buy new things.
Many challenger brands need to influence a culture change to sell their products and services. For example, if you are launching a new food product with sustainable values, there may be an educational piece of work to do for people to clearly understand the importance of these values. But what can you really achieve by doing this alone? It makes more sense to find other lifestyle brands to collaborate with on marketing initiatives that will create more impact on a larger group of people all connected to the same brand philosophy.
So once you have reached the point of testing where you have fully validated who your target consumer is, the next step is to then imagine their 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? This is the exciting part when you can be less scientific, and more creative for your brand to gain credibility amongst other complimentary brands. Good collaborations is where the magic happens!
Through various types of lifestyle marketing and brand partnerships, you can gain many cost efficiencies, and build a much more powerful presence to create positive changes 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 test campaign plan to give your business concept the biggest chance for success.
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