Although for the majority of people it seems like a dream come true, the ones who have tried their luck with entrepreneurship know that the reality of running a startup can sometimes be very harsh. As a matter of fact, in a recent article Forbes brought up a fact that as much as 90% of startups eventually fail. But why is that so? Well, the reasons are too numerous to be counted, but they can all be summed up to recklessness. All the startups which met their early demise ignored the obvious signs that they, at some, point went astray. Here are some of these signs.
You Have Trouble Recruiting New People
Finding first five hires is essential for the destiny of every startup, so if you have problems gathering your “inner circle” you should start to seriously question your startup’s viability. Still, even if you manage to tackle this surprisingly difficult task, your vigilance should not wear off. Every time you have problems filling some position due to the lack of satisfying candidates, you will not only cause a slowdown, and allow your startup to lose steam, but you will also put yourself into a situation where you will have to play along with unsatisfactory staff, which is, arguably, even worse. Outsourcing some position until you find the way out of this situation may temporarily alleviate the crisis.
Most of the teams have a very smooth start. At least, until the honeymoon is over and team members have the opportunity to get to know each other better. If they are not compatible people, they can very easily sink in the mud of opposing camps, envy, and backstabbing. All these things can affect your team’s capacity to solve everyday tasks, and weaken individual members’ ability to successfully sell their ideas to each other. Always remember that your startup’s worst enemy sleeps within its four walls, and put an early end to this threat with the usual team-building activities.
Losing the Focus on the Things that Matter
Every startup is incepted with a very simple idea of solving some particular problem in mind. While it was never a bad idea to explore new ventures and cover more ground, you should never abandon that core idea that brought your startup into existence, especially if it is still in its infancy. Expend – yes, build upon – yes, but never truly abandon. Take some time to determine if you are deviating too much from your core ideas and core products because you can end up losing your core audience in the process.
Slowly Losing the Market Ground
Some entrepreneurs tend to attribute the loss of market ground to temporary difficulties, and myriads of other excuses. The truth is that losing the market ground undermines any startup’s very purpose, and points out to several equally poisonous causes.
- Another brand is leading the pack. There is nothing worse than doing everything good, and falling into the shadow of some stronger brand. Still, this situation is remediable with a bit of cleaver rebranding strategy.
- Losing the touch with your audience. Sometimes, declining sales may point out a gap between your startup and its intended audience. This occurs as a result of the lack of proper market research and manifests in a misdirected marketing campaign, and uncompetitive pricing.
- Shrinking market. If you your products’ competitiveness, branding and pricing strategy are fine, try investing in business intelligence software to get an insight in all elements of your startup’s operations, and see are you doing anything wrong or the market you are operating in is simply declining.
Losing the Nerve
Regardless whether we are talking about your startup or you as its living embodiment, losing confidence in what you are doing can bring nothing good. You will have problems hiring new workers, which will, in turn, cause all the devastation we previously mentioned, your existing staff will start to fall away, and you will lose the angels’ confidence. See if you are withdrawing too much, or having a problem to come up with important decisions, and put some vigor and initiative in your startup’s operations if the answer is yes.
You have probably heard the old saying “where there is a smoke there is a fire”. Do your best then to look out for that smoke and put the fire down while you can. Today’s business environment is relentless; you may never get another chance to make your startup work.