So, you’ve decided to leave your job and turn your side hustle into a full-time startup. Before you put on your Steve Jobs turtleneck and tweet like Elon; get ready for a difficult climb to the top.
Launching a new business is hard. In fact, two-thirds of startups never show a positive return. Working with startups for 13 years, we’ve seen it all. From the great success stories you idolise on Forbes to the major flops like Theranos.
If you want to reach unicorn status – here are 5 slip-ups you want to avoid.
5. Falling Down The Price Hole
Pricing is a tricky art to master. You need to price high enough to cover costs, but low enough to attract customers. But most business owners slip up by ‘falling down the pricing hole’. They discount too early and undersell their product. Good pricing comes from data about your market and customers. Learn what value you bring to those customers. If your product disappeared tomorrow, would they panic or move on easily? Figure this out – then you’ll have a price that works for your business.
4. Ignoring Your Competitors
Competition is in the essence of every profitable business. That's true for every startup and multinational. Once an idea gets hot, it’s common sense to expect new entrants in the market. Completely ignoring them is a recipe for disaster. Although, you shouldn't copy or obsess over your competitors either. Embrace healthy competition. It will push you to be more innovative, focused, and persevering.
3. Hiring Too Early
Let’s face it - you don’t know everything. No one does. It’s why a diverse team with diverse skill sets is the difference between success and failure. But how can you hire a team when you've not done the job yourself? A new team that has never worked together can be a costly disaster. Hire outside experts to get you from 0 to 1. Park the hiring until you’ve got your house in order. This will avoid trial and error, and keep your startup from crashing. Once you reach product-market fit, then bring in a kick-ass team. It will be much easier to hire the right people when you've got a solid foundation.
2. Burning your runway
Time and money are finite resources. As a founder, you need to know how to regulate your spending. Prevent a fast burn and spare yourself a lot of frustration down the road. Remember, your product won’t be perfect from day one. You need to go out to the market to learn. Focus on the core features first, then build from there.
1. Poor Market Fit
Product ideas come dime a dozen. The internet is a graveyard of ideas that went nowhere. The simple truth is; if people don’t need your product, they won’t buy it. It’s why it’s so important to validate first. Prove the demand. Prove you have the solution. Prove you can sell it. Don’t set your business up for an early grave - validate early.
As an agency that works with 100's of startups, we've seen lots of successes. But we've seen even more failures. These slip-ups are ones we've seen time and time again. Avoid these mistakes and you'll massively increase your chances of success.
If you want to learn how you can be in the top 10% of startups – reach out to us. Our tried and tested approach will help you build better products, faster and with less risk.