3 Steps to Building Credibility for Your Startup
The majority of startups fail. Leverage what you've done in the past -- as well as who you know -- to beat those odds.
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How do you convince someone you've never met to trust you? How do you prove to him or her that you're someone who can be relied upon? These are tough enough questions to answer on a personal level, but they're even tougher with a brand-new business venture.
These aren't just theoretical problems either. One of the leading challenges entrepreneurs with new startups face today is convincing users to put their trust -- and in many cases, their personal data -- in a brand they've never heard of before. In fact, 80 percent of consumers base their trust in a product on the reputation of the company releasing it.
Approximately 90 percent of new products fail and if a startup can't gain at least a portion of the credibility that an established company has, it could easily find itself among that sad majority.
Thankfully, plenty of entrepreneurs can build credibility and do so quickly, simply by leveraging their experiences from past ventures. While a startup may be brand-new to the game, the entrepreneur behind it usually isn't.
Play with the whole deck.
It may seem odd (or even conceited) to brag about the past in order to build to the future, but that's exactly what the most successful companies do. People don't buy new Apple products simply because they look cool, they buy them because Apple has an established track record of building quality products. The company has built upon its past accomplishments to create a brand that people actually trust and have confidence in.
As an entrepreneur, your past projects are the accomplishments you can potentially use to build credibility for future efforts. To bank on these past experiences, look toward what's unique about them; what makes them valuable. Saying, "I brought water, and everyone was able to drink" isn't particularly unique. But if you're declaring the same thing and you're in the Sahara Desert, that's a bigger accomplishment.
Use the past to bolster the future.
Here's how you can use your past experience to establish your startup as a credible player right from the start:
1. Use past accomplishments to carve out your niche.
More than 40 percent of all startups fail because they don't break any new ground. Why trust a new service when there are already tried-and-true companies out there? That's why it's important to look back on past experiences. You can figure out what itch hasn't been scratched yet and use your own unique set of skills to resolve it.
For example, NailSnaps founders Sarah Heering and Angel Anderson took their experience in digital media and design and brought it to the world of nail art. The two women saw the woefully inadequate offerings in that field as an opportunity that only they could seize.
Rather than creating a nail product using the traditional process -- which took a lot of time and chemicals and usually left a big mess -- they created a way for users to upload their own photos and designs to an app that would then be turned into nail wraps. Their tech backgrounds helped them carve out a niche in an area that most people assumed was a dead end.
2. Leverage past relationships with established brands.
There's no denying that brand recognition has power. By publicly associating with an established brand, you establish yourself in the process.
Take a look at Uber. While it may seem like Uber was always going to be a success, its prosperity hinged on the willingness of people to get into strangers' personal cars and pay them for the privilege. If it couldn't gain credibility quickly, the company would have been dead in the water.
So how did Uber get the word out that it was the real deal? By sponsoring venture capital events and tech conferences in San Francisco -- instantly linking its brand with the biggest names in tech, and getting out in front of proven early adopters. By hitching its wagon to bigger stars -- even if only by proxy -- Uber not only became visible, it also became cool.
3. Don't be afraid to take a pay cut.
Look at what you're doing, not how much you're getting paid. Don't be afraid to work for a very low cost -- or even for free. If the project itself is really good, the accomplishment will be worth the effort.
This is true for both individuals and an entire company. The PR firm Praytell Strategy, for instance, takes pro bono work alongside its paid gigs without any expectation of reciprocity. More often than not, this good will comes back to the firm in droves, leading to bigger paying clients and, all told, $4 million in yearly revenue.
You have to assess what you've done in comparison to how many other people have done it or can do it. Your experience as an entrepreneur is hard-earned. Don't be afraid to use it to your advantage.