So you have a great idea for a startup. Congratulations! But before you get too far ahead of yourself, there are a few things you need to know that could make or break your business. In this blog post, we will explore three critical errors that can kill your startup before it even gets off the ground. From failing to validate your idea to not having a clear monetization strategy, we will cover everything you need to avoid if you want your startup to succeed.
The reason why most startup fails
The biggest reason that startups fail is "No Market Need", which in short means: nobody cared about your idea.
This is a very important thing to consider, because most of the non-experienced entrepreneur are really in love with their own idea. Don't get me wrong: the passion for your own vision is the tinder of any entrepreneurial adventure, but you must objective and scientific when you evaluate the potential of it.
A test on the market, before the launch of your definitive product will help you in avoiding a huge (and expensive) error.
No validation test
If you're not testing your assumptions about your product, you're in for a world of hurt. A startup can't afford to waste time and resources on building something that no one wants.
Without validation, you could be working on the wrong thing entirely. Even if you're building something people want, you could be building it the wrong way. Validation tests help you figure out what's working and what's not so you can course correct as needed.
Skip the validation test at your own peril.
The inventor syndrome
The "inventor syndrome" is when an inventor believes that their invention is so amazing and unique that it will sell itself with no marketing or promotion. This is a dangerous mindset to have because it can lead to a lot of wasted time and money spent on developing a product that no one wants. The best way to avoid this syndrome is to validate your idea with potential customers before you start building anything.
Another group which it's possible to add to the inventor syndrome are the entrepreneur who would like to launch an expensive and complicaated product, that no one has yet offered on the market. Don't get me wrong: if you are the next Tesla (the inventor) you are free to go with your incredible invention, but if you are entering in a market where nobody, neither Apple, nor Google, Facebook, IBM, etc. has invested some money, probably it is because the success rate is 0 (or the development cost are too expensive even for them).
Cost aka Madness Stategy
The last mistake that will kill your startup is thinking that you can do it all on your own. The cost of starting a business is high, and the risk is even higher. You need to have a clear understanding of what it will take to get your business off the ground, and you need to be realistic about the costs.
If you're not careful, the cost of starting a business can easily spiral out of control. There are so many things to consider, from the initial investment to the ongoing costs of running the business. It's important to have a solid plan in place before you start spending money. Otherwise, you could find yourself in over your head before you even get started.
Plus, here we can insert all the startups that want to go for the cost strategy. Let's start from the beginning: the cost strategy is a very aggressive strategy used by giant companies to get a competitor out of a market or to rapidly get big quotas of a specific market. This strategy is achieved thanks to the quantity that a big company can get, both in terms of sales and supply, decreasing the price and the margin as well.
Now you see why it is impossible for a startup to achieve it: unless you are a billionaire you do not have the money and the dimension to order enormous quantities of materials and sell to millions of customer. Moreover, a startup usually is in loss for the first 3-5 years which means that, by sacrificing your margins, you are pushing away the breakeven point next in the future.