When you first launch your startup, confidence is usually your biggest strength. However, too much of anything is never a good condition. Startups are notorious for being too easy to launch and too quickly to dim. It is like a short-lived star that causes severe destruction once it dies out.
Therefore, learning the mistakes of others is supposed to be compulsory. Here is a list of three of them:
1. Excessive Confidence in the Market
Startups are spawning like locusts in this 21st century, and yet only a few can turn themselves into unicorns. And there are many reasons that explain their fate, but the most surprising one is their confidence in the market. Creating an innovative product does not necessarily produce demands. Thus, not every breakthrough deserves marketing efforts.
However, the case might work the other way around. Sometimes, the products do not sell because the marketing strategies fail. Nevertheless, you should build your financial strength first if you want to create demands in the market.
2. Not Paying the Right Experts
In today’s business environment, outsourcing is the miracle that enables a startup to have high standard products/services. They can entrust some tasks like customer service, administration, server hosting, and even tax management to others so that they can focus on improving the product’s quality.
For example, tax management is one of the most overlooked tasks in a company. In many scenarios, the company thinks that they can handle the tax work by creating an in-house tax division. However, as a startup, such decision will result in unnecessary costs with inefficient outcomes.
3. Hasty Scaling
At some points, companies do scale up their equipment and staff, but for startups, scaling things too soon can be devastating. Equipment requires maintenance, and more employees mean more expenses on their salaries. According to Startup Genome, premature scaling is even identified as the major cause of 90% of failed startups.
However, when too soon is too soon? First, if you are not sure of your repeated customers and the cost you spend to acquire them, then you should not scale up. Second, if the number of new customers seems to be stagnant, then it means that you have not gained a strong foothold in the market. Third, if most of your resources are still allocated on marketing, and yet no significant revenues has appeared on your monthly recapitulation, then stay with what you have, but change your strategies. Only after you do that, you should consider scaling up for better production.…