The untold truth about startup failures: What most entrepreneurs don’t know

It’s a known fact that 90 per cent of the startups fail. Some of the most obvious hurdles are cash flow issues, a lack of research and ineffective marketing which most startup programmes address.

However, there are some things that are only learned through experience. These lessons, however, can be very costly – and even result in failure.

So, what are some of these other pitfalls to avoid?

1. Products that serve the users

Technologists can often get swept up in new and emerging technologies’ endless possibilities. The sales team or even a sales-minded leader can also get carried away by the perceived marketability. Ultimately, the users have needs and responsibilities and they want the products and technology that improves their lives. So don’t let the “wow” factor of modern tech or artificial intelligence overshadow the importance of creating technology with ethics and empathy at its core. Always start with “why”.

2. Minimum viable product not amateur products

We have all heard about the importance of launching a Minimum Viable Product (MVP) to improve your chances of success by getting early feedback from the customers. However, there is a marked difference between an MVP and an amateur product. It’s like taking a vitamin instead of a pain killer to solve back pain. Users will simply not pay for it – good to have but not solving the pain. So, it’s crucial to avoid a premature product launch – however tempting it might be. You need to have a minimum marketable product (MMP) that users are ready to pay for.

3. The power of one – a single convincing value proposition

Less really is more. Stay true and focused on one thing at a time and do it well. Although we need to be flexible and adapt to circumstances, it’s easy to get carried away and create a product that is trying to be too many things. Follow Google’s guiding principle which is “it’s best to do one thing really, really well”. This is invaluable for founding start-ups because once you get this right, it gives you the confidence to then innovate further. Write an elevator pitch which includes one simple value proposition and stick to it.

4. Listen to your gut

Businesses have worked really hard to make sure that every activity can be tracked or is based on data. This is best practice, and cannot be ignored. However, any experienced professional can tell you about the “gut” feeling that indicates something is not right even when on paper, the business case is strong. In particular, tech people are trained to make data driven decisions which sometimes lead to ignoring your gut. This voice is usually based on previous experiences or failures (either in business or life) and it’s important to have a balanced approach between Data vs Gut.

5. One vision. One mission

The CEO and the founding team must be aligned to the vision and hold themselves accountable. If your leaders are not working towards a common goal, it won’t be possible to turn your ideas into reality. The company culture needs to be considered from day one. While diversity of thought and ideas is important, where the purpose and direction are concerned, there must be unity and mutual respect.

Chetna Chadha is the CEO at SilverFern Digital

Read: Insights: Three lesser-known reasons why startups fail