Why You Consider Lessons Learned From Failed Startups
People make jokes about startups and believe me I won’t be the one to defend startups anytime soon, but the only thing that I would suggest you consider the lessons learned from failed startups to understand the moves of entrepreneurs and where they got wrong and ruined their chance to success. I too won’t like to think that my startup would fail. Well, in reality, no entrepreneur believes that his or her startup will fail. Most of the entrepreneurs have a feeling in their guts that they know all and will surely learn everything in the process of launching their startups.
Well, things are pretty different in the real world. In your mind, you will always think that your idea and way of executing the startup is the best and fail proof, but the tough market and regularly changing scenario of the online market and changing preferences of the targeted audience make things difficult. After failing, I decided to look for the reasons why I failed and was a bit obsessed with it. I wish I did this much research before launching your startup because it would have resulted in an entirely different result. Crying over things in the past isn’t the solution, and so I decided to move past of my failure and start from the beginning again to make a new start. I would suggest you to consider these valuable lessons learned from failed startups that every entrepreneur thinking of launching a startup should be aware of.
7 Important Lessons Learned From Failed Startups
1.Lack of Market
Most of the failures have a very similar reason, and that is “Lack of market”. You should know that market is one of the most important and critical factors that will decide whether your startup will be a success or failure. My research has proved this statement to be right.
Even a team with a great product can face failure because of lack of market or audience. Therefore, if you are planning to spend your valuable time in making a product, make sure that there is a big market available for what you are building.
2.Be Prepared to Fail in Three Years
Most of the people think that startups fail overnight. Though it may look as if the startup failed overnight, in reality, this isn’t the case with any startup. Almost in every failed startup, one can find a noticeable and steady decline in several points or one point. These are the points that go unnoticed and aren’t fixed which ultimately results in failure of startup and reality such points goes unnoticed until it gets too late to save the associated company.
Have you asked yourself how much of your valuable time you will be spending on building your startup before the startup fails or turns out to be profitable? How much of your time, not your valuable money? If you haven’t, then I will tell you about the time frame. For a B2B startup, it takes around four years to fail. I have obtained this figure via my research. For a B2C startup, it takes an average of almost three years.
3.Prepare Yourself to Face Facts that are Brutal
Most of the failed startups worked very hard on the technical part of the process; however, they skipped idea validation and business model steps.
“Get out of your comfort zone and face the Truth”
When one starts a business, he or she knows very little about how the business will operate. You should focus on business model and idea validation. 17% B2C startups failed because of lack of idea validation.
Know this fact that most of the time entrepreneurs come up with ideas that are opposite to the market needs. This is the reason because of which you will have to be your worst critic. Try to confirm your idea from different angles. Be sure about your product; you should offer products that people not only want but need.
You won’t prove anything until you have 10-20 customers to pay for your product.
4.Potential Customers also Lie
Most of the time entrepreneurs receive positive results or feedback from their potential customers. Numbers that we were shown made us believe that our product and idea was a hit, but we were nothing but a bunch of idiots for thinking that the responses were true.
Your potential customers will tell you “yes” when you will ask them whether they liked your product or idea or not, but in reality entering their email addresses on the landing page of your website and paying for your product are completely different things.
5.Poor Marketing can Result in Instantaneous Death of Your Startup
Even with your product ready and your idea validated, attracting potential customers for buying your product isn’t that easy as most of the people think it to be. You should know that the second most prominent reason for startup failure is poor marketing.
You will need to understand that marketing is a way to increase your product’s sales and to gain profit by providing your product an ideal platform. No matter how great your product is, but it won’t market itself.
If you want to use marketing as a way to survive in this tough market, then you will have to do a lot of research on distribution channels. You will need to identify the distribution channels that can reach your potential customer or targeted audiences. Apart from this giving time of MVP development and distribution can also help your startup a lot.
6.Without Money, Your Startup’s Game will be Over
Other great lessons learned from failed startups! You will need a financial plan. Without one your startup won’t survive and will not see the light of day. You will need to decide your budget and deadlines way before starting working of your startup. Take every possible step to avoiding overspending your money. We made the same mistake with our startup. For sure at that time it seems like the right decision, but in retrospect, after the failure of our startup, we learned that it was a huge mistake.
Decide your budget for product building. You should keep your money secure until you are sure that the targeted customer will need the product that you are building. In another scenario, you will be just wasting your hard earned money on product building and product that nobody will buy.
You can save a good amount of money by working from your home and hiring people for your startup who can work remotely. Conserve your money for situations when you will really need it.
7.Be Quick with Your Final Decisions
Launching a startup is more than a business idea, it is about bringing one’s vision on the ground, pursuing a dream, and turning great business ideas into reality. Have you ever meet any entrepreneur who would want to shut his or her startup or his dream? Well, I don’t know about you, but I haven’t.
As I already mentioned before that it takes a startup roughly three years for failing. But during this period you will be walking on a rope, and for your betterment, you will have to keep the option of getting off the rope before it turns into your financial and personal nightmare. Your quick decision will help you in avoiding a lot of pain and loss.
Building a startup is surely exciting, and it can also be the worst decision of your life, but taking risks is what we humans are made to do. It is the only way to success. Following your dream is worth such risks.