Launching a startup is the beginning of a long and difficult journey, but knowing the exact odds of success is not the most crucial task for an entrepreneur. The most important question to ask is why so many of them fail. While the economy plays a big part in that, startups frequently make common mistakes that hurt their odds. There are many lessons to be learned from failed startups, which can ultimately help your own business. Click To Tweet
Lessons Learned From Failed Startups
Understanding the reasons behind failed startups and then doing everything in your power to avoid repeating history will help set you up for success. Here are 3 takeaways from failed startups:
- Your Business Must Solve a Problem
- Focus on Survival
- Balance Your Budget
1) Your Business Must Solve a Problem
In 2013, Juicero launched its line of high-end juice machines that required proprietary packets. Turns out, there just wasn’t much demand for a machine that made juice from concentrate out of a $700 machine. Entrepreneurs have a lot of passion for their business, but passion alone isn’t enough. You must offer a product or service that meets a customer need. If there is no market need for what you’re providing, you will have a hard time finding customers willing to pay for it.
2) Focus on Survival
Webvan was one of the first grocery delivery services, and with 800 million of capital, it seemed destined for success, However, investors soon realized that the customer numbers and margins weren’t large enough to support all the planned expansions. They became a prime example of what to avoid doing while scaling. Until your business is solvent, your only concern should be survival – not growth. Have money in the bank, debt paid off, and healthy profits before expansion is even a thought
3) Balance Your Budget
Beepi was a used car marketplace that secured more than 149 million dollars in funding in 2015. However, exorbitant salaries and frivolous spending led to the company blowing through their funding. Spending too much or too little on your business can be the kiss of death. If you’re too cheap, it’ll show in nearly every facet of your business. Employees will certainly see it, potential partners and investors will see it, and sooner rather than later, so too will your customers. Just as damaging, spending too much can lead to disaster.
Starting Your Business On The Right Foot
When you start a business, it’s vital that you have the right equipment, tools, and strategies in place to facilitate your success. Whether that’s a high-quality MFP, print management tools, or a thoughtful marketing campaign, invest wisely in what you need.
Contact Us to learn more about Sharp business solutions for your new office.