I have fun helping start-ups and after years of seeing plans and pitches, I am starting to see some common mistakes emerge.
If you want to build a hedge of protection around your baby and make it soar, spend some time thinking about how well your new business is prepared to handle these issues. Here are five ways to boost your start-up business idea:
1) Are you easy to copy?
If your idea depends on massive scale (especially if it’s digital), what’s keeping somebody from stealing it and scaling it faster than you? Do you own a patent? Do you have the resources and financing to fend off the attack? If not, this is a BIG red flag.
Being bought — a good end game. Being copied by a tech giant and crushed? Not a good thing. How are you going to sustain your idea?
Can you patent your idea? Can you attract funding to scale quickly? Are you focused on a niche that is under the radar? Do you have access to unique people and resources that will give you time to succeed? Are you able to dominate a market by a geographic location?
Make your business future-ready by having an honest assessment of your situation.
2) The marketing priority
By far, the most common error among start-ups is that founder is so in love with the product that they overlook their marketing plan.
“This idea is so cool it will sell itself.” NO. It won’t.
“Marketing? I’ll do that later.” This is a critical function that should be built into the product from the start.
“Marketing isn’t that big of a deal. I can do it myself.”
I have been in the marketing field for more than 30 years and let me tell you unequivocally that this is the hardest time to be successful in marketing. You are going to need help, at least to get you pointed in the right direction.
I’ll let you in on a little secret. When I was creating the business plan for my first business many years ago, the section that remained blank until the end was “marketing.” And I’m a marketer! This is hard work.
If you have no customers, you have no business. Build marketing into the fabric of your business from the start to give yourself the best chance for success.
3) Define your market fit
Can you succinctly describe how you differ from your competitors? What unmet or under-served customer need or want does your new product uniquely fulfill?
I understand that sometimes you don’t know the true value of a product until you get it out there and research can be difficult when you’re boot-strapping. You might even have a product after 24 hours of coding, so why not just get it out there?
But if you’re at the point where you are ready to go to market, you should be able to articulate at least a direction and a theory of how the idea will eventually make money.
How do you fit in the market eco-system? How do you avoid competition that can crush you before you have a chance to become established?
4) Focus on the customer, not yourself
Are you starting a business, or fulfilling a personal dream? There’s a difference.
Yes, a business can be the result of a dream, but don’t let the dream get in the way of logic.
I once mentored (for about one minute) an entrepreneur who had a company name nobody could pronounce, spell, or remember. I think it was something like Mqexiro (but of course I can’t remember it for sure). I told him the name had to go. He went on to explain that it was an ancient Greek term for hope and that this word “nourished” him.
Well, he would be better served buying a quart of Greek yogurt and some granola because his idea isn’t going to be nourishing him for long if nobody knows how to find or even pronounce that stupid name.
My point is that this person was in love with an idea more than he was in love with his customers. I’ll pass. Put the customer at the center of everything you do.
5) Be ready for a marathon, not a sprint
Are you prepared to be broke for two years?
That’s the question I usually ask in the first 10 minutes of meeting with somebody who is ready to risk it all and make a leap into the world of start-ups.
One of the mistakes I made last year was following my heart instead of my head on this piece of advice. I was helping a young entrepreneur and I fell in love with his idea and his passion. He was going to leave a secure job and devote everything to his dream.
This was an excellent business proposition except for one thing. He did not have savings to rely on, he had a young family to feed, and the sales cycle for his product was a long one. He only had the financial resources to run sprint when the race he was facing was a marathon.
I KNEW this was a problem but invested anyway. Sure enough, after nine months he had to take a job again, more or less abandoning everything he built because he had no financial buffer. Lesson learned: Listen to your head, not your heart!
There are LOTS of reasons start-ups fail when they get to the execution phase but these four concepts represent sure-fire failure points I seem to see all the time in the early stages.
What would you add? Why have you failed in the past?
Illustration courtesy Flickr CC and Dagny MolBusiness & Finance Articles on Business 2 Community