The #1 Reason Startups Fail
Recently, CB Insights tabulated the top 20 reasons startups fail. There are some fascinating conclusions in there, but I simply want to focus on the top reason, the one which contributes to 42% of failures:
No market need.
At one level, this is the most obvious conclusion, not worth more thought. But let’s look further.
All of us are so convinced of the need for our products, right? Why would we bother trying to make a business out of it if we didn’t? The problem is that we tend to be surrounded by people who think like we do.
You can only go so long selling to just your family and friends.
Eventually you have to get out there and sell to Other People who aren’t like you. And guess what? You’re not their top priority! They have their own needs and desires.
We all know what the fix is for this:
Clearly identify your target market
Make sure it’s large enough to more than meet your goals
Immerse yourself in their world
Then provide what THEY want and need, not what you think.
This last one is the hardest – because ego gets in the way. You’re more expert and you have a clearer view than those customers do.
If they were only as smart as you!
This, my friends, is precisely the trap. Customers get to decide what they purchase. Period. And if you’re not providing what they have a compelling desire for, your business will fail.
I hesitate to use the phrase that “the customer is always right,” because it can be used as an excuse for accepting abuse. There’s no need to go that far.
But the customer does get to purchase what they want to spend their time and money on. You can choose to line up with that, or fight it with massive amounts of marketing. And fighting usually doesn’t work.
I blog regularly on this topic on a site called The Values Based Business. If you find this article interesting…