5 Tips to avoid Startup failures
Updated: Sep 20
Anyone can start a business, but only a few succeed.
A 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 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 created a philosophy to make you believe that you need their products, not only to function, but to live well and stay connected in belonging to their 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 the 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!
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, who resonates with this, and the size of the market. 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 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 you are interested in, or familiar with, and use this phase to fully test, learn, and adapt continuously before you think about bigger markets, and securing the resources to scale up. It's important at the start to establish the reasons why different sets of customers buy from you, to then decide on a 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 variables receive the most 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 even use your product or service. So it’s always best to test many different communication iterations before you execute an official launch.
5. Consumers are inspired by a desired lifestyle to buy new things.
Many new brands have the challenge of influencing a culture to sell their products and services if they want to disrupt or be noticed above the competition. For example, if you are launching a new sustainable food brand, there may be an educational piece of work to do for people to clearly understand the importance of the product's heritage and nutritional properties, to assign a value to it. But how much can you really achieve by doing this alone on a small budget, which is most often the case? You will gain much more momentum though finding other lifestyle brands to collaborate with on broader themed marketing initiatives.
Creative collaborations 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 the type of numbers you can attract to form an aligned community, the next step is to envision 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 and who are the characters in it? This is the exciting part where you can be less scientific, and more imaginative to explore ways that will build brand credibility alongside other complimentary brands who share the same values.
Through various creative forms of lifestyle marketing, you can achieve many cost efficiencies, to build a powerful presence that affects 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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