Why do so many start-ups fail? This is probably the most asked question in high-growth entrepreneurship. Though surprisingly, it is also the easiest question to answer.
Tom Walker, president and CEO of Rev1 Ventures has been working with entrepreneurs for the last 20 years and through his experience, he has revealed that start-up failure occurs because they fail to solve a market problem with a scalable solution.
That being said, this fact doesn’t clearly address why bright, determined entrepreneurs who are willing to take big risks still fail to solve market problems that produce sales. In this article, we will talk about three main ways you can avoid the agony of start-up failure as an entrepreneur:
1. Solve problems that won’t go away.
One of the common mistakes of start-up entrepreneurs is their desire to solve an interesting problem rather than a problem that needs to be solved. It is easy to become hyperfocused on a particular market and even easier to assume what the market needs. Your goal as an entrepreneur is not to solve an issue that no one has ever heard about, instead focus on addressing problems that are so common, and so well-understood that a solution is only natural.
It is good to be passionate about your project, however try not to justify your idea through the validation of your spouse, family, and friends. Set out to find proof and back your findings with heaps of facts until you are sure that failure is not an option.
2. Study your customers well.
Many start-ups fail because their target customers are strangers to them. As an entrepreneur, it is your job to learn everything you need to know about your target customers. This means conducting interviews and asking them detailed questions about how a particular product or service makes them feel and if they would buy them. Ultimately, you don’t want to sell anything to a nonexistent pool of customers.
Another point to take note of is to gain honest customer feedback. Provide an experience that is so memorable that your customers will be willing to share their experience. Nothing gains an investor’s attention like proof that a business has continuously met with and listened to customers. Early validation helps make concept-stage companies fundable.
3. Improve your credibility with additional external data.
What this ultimately means is to network with individuals who are knowledgeable in the market. Attend seminars, networking events, meetings, and sign up to business associations that will help you understand the market you are trying to serve.
Similarly, expand your sources with strategic relationships — from crucial businesses in the supply chain to information from competitors. Subscribe to their marketing and email lists as they are serving the same markets and customers you are.
Setting up a start-up business is not a walk in the park, in fact, the fear of failure is very normal.
We at Ammak Group understand the apprehension of walking dangerously along the thin rope of failure and success and we would like to offer our expertise in order to minimize your risks. Avail your free consultation with us now by filling the form below.
Remember; it’s your business, our solution.