Coming up with a great idea for a startup is only the start of the journey. There are many potholes to jump over and pitfalls to dodge on your way to the top. This is exactly why 90 per cent of the startups fail.
Optimism and passion won’t be enough - you need a roadmap which lays out the ways to reach success and also warns you about the potential dangers ahead.
The competition is fierce, especially for tech startups and this makes it all the more necessary to be aware and informed of the mistakes that could drown them.
Here are 5 such deadly mistakes which are not emphasized enough:
1. Thinking ‘Product is everything’
CB insights conducted a research on failed startups. It distilled the reasons for their failure and there, in the top 10 reasons, is poor marketing.
As an entrepreneur, I came across my fair share of tech startups and I can confidently say that there is no shortage of ingenious startup ideas, it’s the other aspects such as marketing that seriously lack.
Tech founders are often so focused on building the perfect software or designing the most impressive gadget, that they forget that product isn’t everything. Product sure amounts to a lot - but it isn’t the only ingredient for success.
Take Apple, for example, brilliant products no doubt, but just as brilliant are its marketing campaigns. You will never find Apple slacking off on its marketing attempts however terrific the product may be.
Here’s the deal - you may have an awesome product up your sleeve, but how would people discover it unless you shine a spotlight on it. Figuring out a strategy to make people see and want your product is just as important as building a good one.
2. Obsessing over the perfect technology stack:
Obsessing over a technology stack that will let you scale to millions of users when you don't have any users at all, is obsessing over solving the wrong problem. Remember that building fast beats building perfect, especially in your early days when you don't know if what you're building even has an audience.
Here’s my advice - choose the technology stack that you and/or your team is well versed with, and work on building a good quality and usable product very fast. Do this at the cost of future scalability, if needed.
This is the best strategy to stick to when you are starting out. Also, you can always introduce more advanced technologies later.
3. Thinking your product is "done":
‘My product is all set and done’ is the most inhibiting notion a tech startup founder can have. Products, especially web/mobile apps are never 'done'. For example, if your product is a mobile app for iOS, it’s inevitable that you keep reiterating it with the every new iOS update. ‘A successful product is never done or perfect’ - Geoff Teehan, Product design director at Facebook.
Remember that an absolutely perfect product which needs no updates is a thing of fiction, and thinking your product is 'done' means you'll not evolve and improve, which further means you'll become outdated and die, no matter how good and dominant in the market you currently are.
The only successful product is the one which is updating quickly with the changes in the market. For instance, there are many task management apps for people to pick from out there and what will make your task management app stand-out are the new features and updates you have to offer over your competition.
Having a well-laid roadmap for your product is very important. It means you have a vision for the future.
4. Thinking employee happiness is none of your business:
In the early days of a startup, we are caught up amongst so many things and it’s easy to overlook employee happiness. Even if all you have is one employee, employee satisfaction is important.
Consider this, if one person leaves out of a 3 member team, the churn is 33%. Losing a trusted employee and a good teammate is one of the worst things that can happen to an early stage startup. It changes the entire dynamics of the team.
Synergy in the workplace is paramount, especially when building a fragile infant company. Yet, startups don’t often see creating a happy workplace as a priority.
Take all possible efforts to build a workplace where employees don’t burn-out. Expect everyone to give their best at work, but at the same time, be aware and conscious of their personal commitments.
One of the most contributing factors for employee satisfaction is flexibility in the organization.
5. Scaling before you have a product-market fit:
It’s tempting to raise a lot of money, put it into a deep, heavily featured product, and hire a marketing and sales army. While this is the right thing to do once you've reached the right stage, having a few paying customers should not be viewed as product-market fit.
You need to establish that there is sufficient market to justify the spending of the capital, both financial and human.
Here are a few questions which can help you figure out if you are ready to scale:
- Are your conversion rates above or close to the industry average?
- Are you able to get good reviews and mentions of your product in the press?
- Are majority of your prospects responding to pull marketing or do you have to push?
Customer/prospect indication that they are interested in or need your product is the best validation you can get for your product. Start scaling only when you have a fit with a large, lucrative market.
While the list above is not exhaustive, it is a great place to start and is an excellent list of checkpoints to refer to when launching your tech startup.
One single most important lesson to take away with you is, before launching, do as much research as possible - research the market, the potential dangers, the competition and more.