This is a user generated content for MyStory, a YourStory initiative to enable its community to contribute and have their voices heard. The views and writings here reflect that of the author and not of YourStory.
80% IT STARTUPS FAIL; HERE'S WHAT YOU NEED TO KNOW, TO BE IN THE 20%
This is a user generated content for MyStory, a YourStory initiative to enable its community to contribute and have their voices heard. The views and writings here reflect that of the author and not of YourStory.
As an entrepreneur, I have tasted failure. I’ve made mistakes, pretty stupid ones. At the same time, though, I’ve been fortunate enough to succeed a few times, too.
Along the way, I’ve been able to understand some of the lesser-known reasons why some startups fail, and more importantly why a few succeed.
How many startups fail?
Eight out of ten startups fail. This is a hard and bleak truth, but one that you’d do well to meditate on. Entrepreneurs may even want to write their failure post-mortem before they launch their business.
Why? It’s because optimistic entrepreneurs needs a dose of reality now and then. Cold statistics like these are not intended to discourage entrepreneurs, but to encourage them to work smarter and harder
What are the characteristics of startups that succeed?
There are plenty of characteristics of successful startups. My goal isn’t to list them all for you, but rather to point out some of the most significant causes of success.
1. The venture is perfect for the market.
Fortune reported the “top reason” that startups fail: “They make products no one wants.” A careful survey of failed startups determined that 42% of them identified the “lack of a market need for their venture/product” as the single biggest reason for their failure.”
Under-the-hood look makes it clear. The overlooked key aspects of business process and the “boring stuff” also needs a change. The CEO thinks, “It’s my job to lead.” The CMO thinks, “It’s my job to market.” The lead developer thinks, “It’s my job to code.”
Successful entrepreneurs are clearer with the weightage of marketing in a venture and they are forced to keep an expense apart for marketing.
2. The company grows fast.
The second major reason why startups fail is that they “run out of cash.” Why did they run out of cash? Because they didn’t grow fast enough. If your startup can grow fast, you can effectively bypass some of the biggest startup killers like losing to the competition, losing customers, losing personnel, and losing passion.
3. Know your team
A team for a venture acts as the building blocks. Without a strong and defect less base and structure a building cannot sustain for long. In the same way a team has to be built with precision. Hire skilled, experienced and entry level employees to make a balanced environment. Employees under reference should not be entertained unless venture is financially stable and balanced.
4. Were to get project.
In the initial stages of business, your projects are being provided from society, friends, and relatives. From then on, entrepreneur is blank on how to get them. In this point, you will rely on social media and your chance is only 2% to get your projects and the main obstruct are the competitors. And finally they are pushed to failure.
Entrepreneurs who invest capital amount for marketing and thereby to get projects are those whom we call successful entrepreneurs. And the rest of them, think its luck that brings in projects and mostly startup employers show ignorance to the marketing/ source to get projects.
Without delay change your mind and invest money on marketing and attracting projects to your company.
5. Negative thoughts
Every entrepreneur has started business to make a good fortune and raise the bars of living. At times they ignore the realisation that nothing comes for free and money has to be invested in the initial stages. Marketing is a MUST thing in the expense checklist. Marketing via social media can only help you to make a good reach for your venture and much of invested on it is not a point. Without a delay realize that no one will bring in work for you to walk you over to success without an effort.
So if you find a source to get projects, then the initial thought that arises in you is if to believe or not. You must not forget that this thought will arise in the mind of your providers too. If you believe that you are the one to create a possible solution to your problem, believe and move forward.
Stop thinking negative with every way that appears in front of you and trust others and make your way towards your success.
Clear and Clean agreements should be kept for all process and initiatives without fail.
6. Competitors
As we are aware, it is a blind truth that many start companies are budding every day around us. In this prevailing situation, to get a project assignment is a 99% difficult task. Never blame your competitors for your status of growth ever. Those who work smarter and harder will succeed. But always keep in mind, under negotiation; never spoil your reputation by quoting the least for a project. Keep up your reputation and a track of all the effort needed behind a work.
7. Place of Work
If an entrepreneur invests a huge amount for the office infrastructure and amenities, he himself is opening the door towards failure. NEVER think that a work is awarded to you by a client, after being dazzled with the office infrastructure. This is a wrong assumption in the mind of many entrepreneurs. To attract employees to your office too, office look is not that matters and only the salary package and basic infrastructure is all that matters.
Be a smart entrepreneur, without making the mistake of creating a modern and high amenities and infrastructure provided office space. Infrastructure can be modified after you are stable and settled in business. Sharpen your work quality and attract clients. If business meetings are to held with clients, prefer a good Hotel/ location for the same.
Are the reasons for success the opposite of those for failure?
There are things that you must possess to be a successful entrepreneur, but they won't guarantee success. That said, it stands to reason that if you fixed the reasons for business failure, you would at least improve your chances of success. So, I decided to look at the side-by-side comparison of the reasons for failure and the factors for success.
If you look at both the reasons for failure and the factors for success, it is clear that commitment to a plan is key. This, of course, implies having a plan. This does not mean that you are completely inflexible, but you can stay the course. This is why the most successful companies have one or two pivots. I do not think that every little business adjustment or fine-tuning as a pivot. So think and act fast!