Thinking about starting a startup?

Or maybe you’re looking to work for a startup?

 

In both cases, you may be wondering what that means. A startup is a newly established business. Starting from scratch and building their way up.

Startups provide a different culture and experience to a traditional job. It’s exciting, it’s different and it’s rapidly changing.

However, there may be some obstacles along the way. From our startup to yours. Here are some tips we found.

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No Market Need

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What do all successful startups have in common?

 

Their product or service solves a consumer problem or fills a consumer need.

 

So you have to ask yourself, what problem does my startup solve?

Really, what need does it fill?

 

This can’t be you convincing yourself it does this thing for a certain person. Your assumption could be a problem for your company.

 

So how do you fix that?

 

Do your research, go out there and survey people. Find out if this is something that they would be interested in. Something they would use. It doesn’t have to be stopping people on the street. It can be asking friends and family. Or creating online surveys and polls.

 

Get out of the building and test your assumption!

Financial Problems

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You might be rolling your eyes at this one. Obviously, this is a common reason why startup companies fail. If a company runs out of cash, they are done. Thanks, Captain Obvious!

 

But let’s look at why companies run out of cash?

 

Bad planning is often the biggest reason. Because of not accurately estimating your company runway. Runway being your current cash position divided by your monthly cash burn.

 

Or your burn rate has increased due to reckless spending. Both for the business and outside of it.  Yes, you’ve worked hard, but your trip to Las Vegas might have to go on hold.

 

Many companies are underfunded.  This may be because they didn’t receive financial assistance. So get out there and make your pitch to everyone that will listen!

Competition

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Creating something that someone else is making?

 

Or maybe you’re not first to market?

 

You are going to get competition. Competition is always hard. It means you’re likely going to have to spend more money.

 

Especially if they are a bigger or more established company. These companies may have bigger budgets to throw at their research and development.

 

Bigger budgets for customer service and marketing. And likely a brand name that people know, or have bought from. That means they are more likely to buy from them again.

 

To compete you have to make sure your product quality remains high. Selling a cheap product to undercut prices, may turn off customers. Word gets around through the internet. Because today, online reviews are a standard.

 

So don’t ruin your idea!

 

Sell them on your idea, sell them on your vision.

 

Align your wants and needs to the customers. Sell them on the journey.

 

If a customer feels as if this product aligns with them, they are more likely to buy it. Or they may see the journey you have been through, with the hard work. That might make them buy from you.

Pricing issues

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Choosing the price to sell your product is tough. If you set the price too high, it won’t be affordable to some. Set the price too low and you might not make enough revenue.

 

If the price is set too high it might be seen as a premium product. If it’s set too low it might be seen as cheap.

 

It seems like you can’t win!

 

The only way you’ll know is with research. See what the competitors charge for their similar product. Survey and talk to your prospective consumers. See what they would be willing to pay for your product.

 

Pricing can change over time too. Price it low at the start, if it’s popular or successful, raise the price. If the product is not doing well, lower the price.

Poor Product

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The product idea might be brilliant. It could be the next Facebook. But that won’t matter if the app isn’t properly bug tested. Bugs in apps frustrate and annoy users.

 

Some bugs users can put up with.

 

But bugs that close or make the app not usable will make users uninstall it. Make sure to properly bug test the app. If hiring the bug testers is too expensive, send out a beta version of the app. Incentivise beta users to give feedback on the problems they are finding.

 

Another reason it could be a poor product is that it was just poorly designed. Again, it could be the best idea, but if it doesn’t make sense to use, it won’t succeed.

 

Make sure the app flows. Make sure that the app makes logical sense.

Where is everyone?

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Imagine you’ve made your product or app. But you haven’t gone any further than just making it.

You’ve just thought “build it and they will come”. But they won’t always come. It might be the perfect app, but if no one knows, it likely won’t take off.

 

The app needs to be marketed. Create awareness for your product!

 

You’ve worked so hard on it, so don’t skip the marketing.

 

Be creative with your marketing, try something new like viral or guerrilla campaigns.

 

Doing something that will help you stand out from the crowd.

Lack of passion

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If you’re doing this for money, it’s going to be rough. I mean, starting a startup is usually rough anyway. It’s a lot of work. But you do it because you believe in the idea. You are passionate about your product or app.

 

You want to make the best product you can because it’s yours.

 

But if you are you here for the money, there isn’t that drive. There isn’t that passion. I’m not saying it’s impossible because it isn’t.

 

Many people have done it. Many will create a product or service just to make a profit. But they won’t have the same experience as someone creating for passion.

 

These are the reasons we found were most prevalent when start-ups fail.

 

There are much more, these are just a generalisation. But still, I hope you take this advice and go and start your start-up!

 

Like I said, it’s weird, it’s stressful, it’s a lot of work. However, it’s going to feel less like work, as it’s not your standard job.

 

So if you’d like to take your first step, contact the Launchpad quote page. We at Launchpad specialise in creating apps for small start-up companies. Let us take this journey with you!

 

Have you heard of Design Thinking? It’s consumer-centric design process. Curious about it and how it can be applied to your business?

 

Please read our blog, here.

 

  • Jayd Brick

    Thanks for the article Liam. Insightful stuff.