Starting your own company is a great achievement. If you’ve followed through on your idea for a startup, you should feel proud of yourself and all the work it took to get your company going. But be careful; plenty of startups fail every year. In fact, an estimated 90% of startups miss the mark annually. Many startup owners end up thwarted by the same mistakes and hurdles.
The odds may not seem in your favor, but don’t panic — with the right guidance, you can avoid these common pitfalls and get your startup prepared for its formative years.
No Clear Purpose
Every great company sets out with a clear vision of what they intend to do. Your startup should provide a solution to a problem or meet the demands of your targeted consumer. Unfortunately, this isn’t something that many startup founders deem important. Founders often try to build their businesses around vague concepts without fully fleshing out small details. But when your startup’s vision is overlooked, problems arise.
If your startup doesn’t have a solid design, your business can veer off-course rather quickly. The first year of any business is always the hardest, but a company with a solid identity and sense of direction will last longer than one without. Your startup needs to have these key components in order to give your work any real meaning.
Without purpose and meaning, how can your team feel motivated to work? Have you ever driven somewhere without a specific destination in mind? Needless to say, you probably won’t end up where you want to be.
You Aren’t Prepared
No one said creating your own startup would be easy. Heading your own startup is a serious life change that you and the people around you need to be ready for. Keeping a business alive in its formative years means hours of hard work, with noticeably reduced time for your personal life. Many people don’t understand the painstaking work it takes to bring a startup to life, and end up calling it quits.
Your friends and family also need to be fully informed of what you are planning to achieve so that they can stay supportive of your cause and provide you emotional support when the going gets tough. If they aren’t aware of the personal sacrifice startups require, they may feel alienated by your increased absence.
No Product Focus
It’s great to have ambitious goals. But when you’re starting from the ground up, the only way to succeed and achieve longevity is to hone your product. Many startup founders confuse their potential customers because they are trying to do more than they should way too soon. Having a clear, understandable product makes it easier to educate your customers about what it is and why they need it. You don’t have to appeal to everyone. People may tell you to add features or even additional products to appeal to a bigger market, but doing this can actually weaken your message and turn you away from your core audience.
Refusing suggestions isn’t easy, especially when those suggestions are coming from investors, customers, or even your team members. While it’s important to stay open to people’s criticisms, it’s also okay to say no. Focusing on how you can perfect your core product will earn you a loyal customer base.
Forgetting to Make Your Product a Business
If you want your startup company to be around for years to come, you need to find a way to build upon initial successes. All products are purchased for a specific individual need. But your startup needs to be configured in a way that allows repeat business. Consider this question in mind: how are you going to continue to make a profit after your main targeted audience purchases your product?
Successful startups have found many different ways to overcome this problem. Some startups have licensed their products for use by other companies. Others offer their services at monthly or annual fees. Companies like Instagram thrive off of ad revenue. Above all, long-lasting startups continue to find new ways to innovate their product to make it better each year.
Focusing on Investors and Not Customers
Not everyone will understand what you’re trying to accomplish. Ergo, not everyone will applaud your product idea and give you the funding you’re looking for. Although most startup founders would prefer it, you don’t need an investor to fund your idea in order for your company to be successful. Many startup companies are too focused on finding someone to pitch to rather than customers who are genuinely interested in their product.
Don’t worry about funding. Investors aren’t interested in how great or useful your product seems. They care about whether your product can be sold to as many people as possible for as long as possible.
Drop the pitch and find customers that would actually pay for what you intend to sell. Having willing customers will make finding an investor a whole lot easier.
Ignoring the Experts
You can’t build a successful startup alone. None of us are experts at everything. Forming and maintaining a business is hard work that requires knowledge of more than just the product you have. You’ll have to navigate your company through taxes, legal issues, contracts, and stats, among other obstacles. Don’t depend on how-to guides or online tutorials. Find an expert that can help guide you through the rough patches.
Experienced business people can offer great advice on how to find funding (if they’re not already an investor), perfect your pitch, and find places in the market where your product will thrive. They’ll also be able to help you handle all the day-to-day needs of your business.
Not Saving Money Where You Can
Let’s face it: you’re not exactly a fortune-500 company just yet. If you’re the founder of a startup company, you need to find ways to cut your monthly costs so that you can spend your money on building a great product, while still being able to pay your dedicated team.
Don’t spend more than you need to on your office space. 360 Lab San Francisco has options that work for companies of all sizes. With an all-inclusive monthly fee, startup owners have access to tons of amenities and ample space to meet their business needs. If your business is on the rise, don’t worry. When your business grows, your space at 360 Lab San Francisco grows with you. Contact a representative to find a cost-effective space for your startup.