One idea can change the world.
Jeff Bezos had a promising career as a wall street investment banker. He was making 6 figures and was on the rise within his firm. While some would be content to move through the paces of a promising career, Jeff had an idea. It was 1994 and the internet was new and exciting. Jeff saw an opportunity in the brand new world of electronic retail. What started out as an online bookstore has now become the standard for how e-commerce businesses should be run and become successful.
For every Amazon, there are hundreds, if not thousands, of startups that fizzle out.
Here are five common mistakes that business startups make and what you can do about them.
Developing bad or wrong products
Imagine being able to view messages in your field of vision where ever you were. Surfing the web, just a blink away. Being able to have augmented and virtual reality all in the raising of glasses. Google did. In 2012 Google launched the google glass, and it was thought they would change the game in wearable tech. Now in 2018, there is nary a whisper from google about this “innovative” new product. What went wrong?
The Google glass was competing with other devices that had superior cameras, faster processors and larger capacities. That and a price tag of $1500 meant they had a product that was inferior in functionality and more expensive than anything close to being a competitor.
The key to selling or creating a great product is solving a problem or filling a demand.
Google made the mistake of developing a product first and then tried to find someone to buy it after.
By taking the time to research your market and finding out what problem you can solve will pay off in the long run. “If you build it, they will come” only works in Kevin Costner movies.
Not educating your market.
Tivo came on the market and almost instantly became a verb. “I’ll Tivo that.” While it was an innovative device, the market was unsure of what it was and what it meant to their lives. The ability to pause live TV, record our favourite shows, and fast forward through commercials is something that we take for granted in these days of the DVR.
One of Tivo’s big mistakes was not educating their market with how they were going to make their life better.
While a product or service may be a game changer, your customers need to understand how it is going to make their life easier. What problem are you solving?
Business model failure
Blockbuster vs Netflix.
All joking aside. Netflix had their finger on the pulse of where the future in media consumption was going. Instead of doubling down on what was already working for them, they flipped their entire business model on its head. They became a pioneer in online streaming media.
Blockbuster chose to double down on what was already working instead of looking to the future. Have you heard the term “Blockbuster and chill”? Me neither.
By embracing innovation and change Netflix has changed the way the movie industry works.
Pockets get empty.
An app where you could pay a subscription and then attend as many movies as you want. It seemed like a business model that would garner the attention of many people. Movie pass, at the time of this article, is on life support. While it was a great idea and there is a market for it the company does not have the cash flow to keep in operation. Due to cash flow issues the company is continuously dealing with shutdowns.
Having a “runway” is essential when starting a business. Making sure that you can pay the bills and keep the lights on while you build up your customer base is as important as having the next big idea. Too many startups fail because they do not take into account they need a certain amount of money in the bank before they even open their doors.
Business is a team sport.
For every Steve Jobs or Elon Musk, there is a team of individuals working behind the scene to bring their visions to life. Many great ideas have failed before launching merely because they did not have the right people in place to help turn a dream into reality.
As startups grow so should the team. Having the right people in place to do what they excel at can take a new company to the next level.
There are more than five reasons why startups fail. Books are written on this subject. The one common theme is to make sure you are researching. Always talk to your potential customers and watch what your future competition is doing right and wrong. Research is always going to be a winning investment.