The five most dangerous startup mistakes
30 May 2018
I’m sure you’ve heard many statistics about your chances of start-up success – or rather your chances of failure. According to research, it’s most likely that after five tough years you’ll no longer be in business. Your great idea was just that, an idea. It never really made it off the ground and those dreams of being the next big success have vanished.
We’re always surprised by the lack of time startups spend thinking about and validating their idea before taking the big leap into self-employment or asking for investment. You see, it’s not good enough to have a great business idea, you need to prove that you can satisfy your customers’ needs in a profitable way – and in order to be successful, you’ll need to nail this.
Below are the five most dangerous startup marketing mistakes:
1. Focussing on the product, not the market
This is by far the most common, and most costly, mistake start-ups make. And it’s something we find much more common with innovative start-ups than regular start-ups. When you ask a regular start-up why they started their business, they usually respond with ‘I had a skill, people wanted to pay me for it, I started moonlighting on the side of my real job, and then I got busy enough to take the leap and start my own business’. With innovative start-ups it’s usually; ‘I’ve created a clever solution to a problem I have’.
There is a big difference. You see, the regular start-up has proof that other people want to buy their product or service; in fact they’ve already made some sales before they even started their business. The innovative start-up however hasn’t asked anyone, they’ve seen a problem from their point of view, and started making a solution. At no point have they stopped to find out how many people have the same problem, and of those people how much they will pay to solve it.
So before you even start thinking about the details of your product, go and ask people if they have the same problem as you’ve identified, ask them how important the problem is for them to solve, and if they’d be willing to pay to have it solved. If you ask the right questions you’ll very quickly work out if your idea is a goer or not.
2. Doing too much, too soon
There are very few start-ups that have been brave enough to do just one thing from the outset. We all seem to start by spreading ourselves thinly and saying we do lots of things. It makes sense, the more we do the more chance we have of getting a sale. However, the start-ups that are successful are the ones that quickly realise they need to be more focused. When we’re working with start-ups, helping them to nail their value proposition, almost without fail they end up talking to us about the additional features they plan to add so they can make more money. Being excited and passionate about your idea and having a clear vision on how to increase your profits is great – but you’re spreading yourself too thinly. Not only does it make it very confusing to try and explain what it is you do to investors and customers, it’s adding to your workload and making it much harder to get a product launched to market before you run out of cash.
In the early stages of your business, it’s best to stay focused. Pick one feature that solves one problem, for one audience. Make sure that problem has a big enough market potential, and stick to it. Additional audiences and features can come later – once you’ve got your first product out there and established yourself in the market. You can even use your existing client base to validate the need and profitability of any additional features you may be thinking about to see if it’s worth your time and money.
3. Not understanding the customer
Very few start-ups that we’ve worked with have a clear understanding of their customer. Whenever we hold a Communication Workshop, whether stand-alone or part of our Pitch services, it’s always the ‘customer insights’ part where a founder struggles most. Sure they know who their customer is, but they don’t really know what they want.
We spend a lot of time helping our start-ups to better understand their customers’ wants and needs. Because, quite simply, once you understand what main problems your idea will solve, or what benefits your product will deliver, you’re in a much better place to persuade customers to buy your product and get potential investors excited.
4. Being complacent about the competition
“We don’t have any competition, our product is the first of it’s kind”, said nearly every innovative start-up ever. Please don’t be one of these start-ups. You always have a competitor. Now, this competitor may not be offering the same solution as you, but if you are truly solving a real problem (which should almost definitely be the case if you are to be successful), then there’s already a way people are handling that problem. This is your indirect competitor. A customer’s decision to ignore the problem is your competitor as well – because if they’re ignoring it now, what’s going to make them change their mind and use your product?
5. Failing at start-up marketing
There are three common assumptions that we see start-ups make about marketing their idea;
- We have a brilliant idea, it will go viral all by itself
- We’ll enter the market with a big launch
- Marketing budgets are huge, we’ll tackle this after funding
Ok, so firstly, thinking your idea will go viral all by itself is essentially saying that you’re going to do nothing and hope for the best – probably not the wisest strategy. You need to plan your campaign, think about the touch points you’ll use to communicate to your customer, as well as the words you’ll use and the story you’ll tell to give them a reason to buy, or trial your product. Secondly, the idea of a large launch is typically reserved for well-established, traditional businesses, but it usually ends up in a massive waste of money and disappointing sales for innovative start-ups. Typically you are releasing something new into the market, which means very few people are probably ready to even consider using your product right now, so an approach that focuses on converting early adopters and developing brand evangelists may be a better approach.
Additionally, before putting money into a new idea, most investors will want to see some kind of traction, so ignoring marketing until you receive funds isn’t an option either. We find that investing a small fee in building an engaged audience prior to launch, even before your product exists, can help you grow a ready made audience primed to buy your product. Or by bringing in an expert advisor in return for a small equity stake at an early stage can really pay off in the long run – investing in education, and doing much of the leg work yourself, can be a much more cost effective way of growing an audience in the early stages of your business (providing you have the capacity to do each role effectively).
[bctt tweet=”Thinking your idea will go viral all by itself is essentially saying that you’re going to do nothing and hope for the best – probably not the wisest strategy. #startup #marketing” username=”robotmascot”]
Hopefully you don’t recognise any of these as something that you do in your business, but the chances are you’ve probably committed at least one of these start-up marketing mistakes. We hope that, by sharing these with you, we’ve reduced the chance of you ending up as a start-up failure statistic – we’d much rather you flourish into the next big thing.