8 Reasons Startups With Good Ideas Fail
Ilya Pozin, Contributor ~
Most startups fail. Having a good idea isn’t always enough to be successful. I’ve personally been behind the build and marketing of over 2,000 websites for clients, serve as a mentor for StartEngine, a startup accelerator, and have founded several companies of my own, including Ciplex.
My experience has allowed me get a clear picture of why startups succeed and fail. Here are eight reasons startups with good ideas often fail:
1. Give up. When it comes to business success stories, a common trend you’ll hear is that the founders never gave up. They stay completely committed to their idea, and don’t let the roadblocks slow them down or stop them. A sense of resilience may be the most important aspect of success. You may get a lot of “no’s” at first, but pushing through the negativity can mean the difference between success and failure.
2. Ideas alone are worthless. Ideas themselves don’t create successful startups. Chances are, if you’ve got an idea for a startup, someone else has already thought of it, too. Ideas themselves aren’t worth much—it’s the people behind the ideas that matter, and how committed they are to executing their vision.
3. Overbuild. Too few startups focus on creating the minimum viable product, or MVP. Creating the MVP means developing a product that’s easy to understand from the get-go. Many startup founders think developing multiple features for their product will separate them from the competition, but having a feature-rich product actually takes much more time and money to build. Take Facebook, for instance.
When they first launched, they kept it simple, and didn’t roll out more complex features like timeline or the “like” button until later. By launching their product with very basic, core features, Facebook was able to promote better user adoption. Too many startups focus on differentiators and features instead of keeping it simple and focusing on speed and ease of use. Don’t overdo it!
4. No plan for marketing and user acquisition. There’s a widely known theory in business: “If you build it, they will come.” This actually couldn’t be more incorrect. My company helps customers with user acquisition and marketing. One thing we’ve seen is that most startup founders focus so much of their time and money on their product and the launch that they completely neglect to develop a strategy or create a budget for acquiring users and actually marketing the product. Startup founders need to develop a marketing strategy from the get-go if they want to truly see people use their product and share it with others.
5. No mentors. While I mentioned the importance of resilience when it comes to getting your startup off the ground, don’t ignore the advice of mentors. While it’s often okay to throw out criticism you don’t find constructive, it can be even more damaging to neglect to take the advice of those who have come before you. Be open-minded about feedback from more experienced entrepreneurs, and use your best judgment to gauge whether or not criticism may require you to change direction.
6. Cast a wide net. If your target audience is too vast, your idea isn’t going to last. The best startups locate their niche as well as a small target audience, which makes marketing much easier and cheaper. For example, perhaps I’ve decided to create a product for writers. Imagine me trying to reach every writer in the country—a huge undertaking. If I narrow down my target audience and market only to users in one area—say, Orlando, FL—with one thing in common–say, comedic writers or poets–it will be much easier to focus my marketing efforts.
7. Wrong team. Another huge reason startups fail is because the founders bring in the wrong partners. If you want your startup to be successful, you’ve got to find partners who are on the same page as you but differ in key areas, like idea-oriented versus execution-oriented, or right-brained versus left-brained. Your partners should also offset the build of the business–after all, two guys with ideas aren’t going to get as much done as say, an “idea guy” and a developer. Overall, your partners should agree with your goals and be just as passionate about your ideas as you are.
8. Solving the wrong problem. Naturally, entrepreneurs are usually at the forefront of technology–they use the latest gadgets, apps, and websites. In Roger’s bell curve for adoption, these entrepreneurs are typically innovators or early adopters, and they often have ideas to create businesses that end up making their lives easier. But in the real world, your business is nothing until you’ve reached the majority. For example, I often meet entrepreneurs who believe Craigslist is horrible and they know how to make it better, but there’s a reason Craigslist is as successful as it is–it’s simple. Craigslist hasn’t added more features or redesigned their site since launch. It targets the majority, and that’s where the money is. It’s simple, fast, and easy to use – making adoption and learning curve minimal. Many entrepreneurs fail to see that the problem their idea aims to solve has a very small target audience and doesn’t fall into the majority of users.
If you want your startup to succeed, being ambitious and driven isn’t always enough. You may have a good idea, but it’s not going to go anywhere if you can’t follow it up with a compatible team, a focus on MVP, and a solid marketing plan. Avoid these mistakes to give your ideas a real chance at success.