Almost everywhere in the globe, you will agree with me that Startups fail at the rate of 90 percent, or probably you might not be aware of this but that is fact. That’s kind of scary, if you ask me. Most startups fail at their first 3 years and guess what, if you too are working for a startup, getting one off the ground or investing in one, these eight steps are for you. They’re the main indicators you might fall out of that business soon too.
- You dont know your customers.
I know this sound old, but I have to say it. Everyone repeats hackneyed phrases like knowing your target audience and developing a persona, but few businesses actually get it right.
Its crucial to get inside your audiences head and really figure out what makes them take action. What problems are they facing? What fears are they experiencing? What goals are they pursuing?
Know these people! Your business does not exist without them. Entrepreneurs fail because they live in a hyped-up, adrenaline-fueled, fast-paced startup environment thats a complete dream. Theyre not on the streets connecting with real people. They have a startup dream, but its not rooted in the reality of their day-to-day customers. Those customers are the people who will hopefully buy your product.
Know your customers, and you’re less likely to fail.
- You’re stuck in a mental trap.
We all have patterns of thinking that we follow. Maybe its our cultural background. Maybe its the best practices that we picked up at a former job. Maybe its something we read online.
Whatever it is, we need to be flexible enough to change our mindset about things. What do I mean? Just because you think something is the best way does not mean that it is the best way.
Challenge your thinking by taking risks, trying new things and experimenting with differing viewpoints. Your goal is success, not being right.
- You’re oblivious to market forces.
The market is unpredictable, indomitable and sometimes annoying, frankly. But you’ve got to deal with it.
If you pretend that market forces wont affect you or your industry, you’re setting yourself up for major failure. Look, the market is impersonal. It doesn’t care about your feelings or your plans. You’ve got to adjust to it, because its not going to make room for you.
- You don’t pivot fast enough.
I know that pivot is an overused term. Nevertheless, it is an important concept. If you’re not ready to pivot, you’re going to fail. Its just that simple.
The faster you pivot, the more likely you are to stay alive longer. Pivots are what keep startups alive. Don’t be surprised if you have to pivot five, 10or 15 times during the first couple of years of your company’s existence.
- You don’t execute fast enough.
Execution is key, friend! You can dream up amazing business plans, but unless you’re executing, nothing happens.
Success entails executing faster than the other guy. The best entrepreneurs arent the so-called dreamers and visionaries. Nope. The best entrepreneurs are the people who make things happen not those who dream things to happen.
- You’re busy doing the wrong stuff.
Being busy is not a sign of success. Its not even a mark of productivity. Busy is good only if you’re doing the right things. Too often entrepreneurs get really busy, and this blinds them to the fact that they’re busy doing the wrong stuff!
First, get clear on what you’re doing and why youre doing it. After that, you have permission to be busy.
- You’re not focusing on revenue.
This is a BIG one – Revenue. There are a lot of moving parts in a startup environment, and you have to keep tabs on everything. But if you lose sight of revenue, you’re done. Its a major warning sign.
Revenue is the goal. Its the end game. This is why you’re doing what you’re doing. Keep your eye on the goal –focus on revenue –and it will keep you from going down in flames.
- You don’t know your runway.
Cash is what keeps a startup alive. Once the cash is gone, so is your business. Simple advice? Keep an eye on that piggy bank! Don’t let your money run out.
There’s even a term for it — runway — meaning the time you have until your startup runs out of cash. So, go rustle up some funding. Beg from a rich uncle if you have to. Just get some money. The best position to be in is a position of knowledge and control.
You know how much money you have left. Only you know how much longer your business can exist and only you can control the flow of cash. In simple terms, you need steady CASH FLOW to run a business successfully.
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