The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way.
Paul Graham, Y Combinator
We’ve read multiple breathtaking success stories and even more heart-breaking stories of business failures, with all the reasons and numbers behind them.
We can analyze all the stats and predict that an IT development startup will flop or thrive. There is a proven way to plan everything, mitigate risks and avoid mistakes.
Or is there?
Today’s world is dynamic and so is the market. You can’t foresee everything, because each startup case is unique.
Besides, you won’t enjoy the sweet fruit of success without your own bitter share of mistakes first.They come with the recipe. Take it or leave it.
So can’t you learn from other startups’ experience?
You won’t manage to predict and avoid all the pitfalls. But you CAN use others’ experience to avoid the most critical ones.
Killer #1: Am I creating the right thing?
Is your product in demand? You may think that it is, but thinking is not 100% certainty.
While it may seem too evident and simple, lack of customers is the #1 reason why so many startups with great ideas sank (42% of cases).
Your product may be the most creative and ground-breaking ever. Yet, if there aren’t crowds of customers waiting to buy it to solve their burning problem, your business will be penniless. As Patient Communicator wrote about their post-mortem:
“I realized, essentially, that we had no customers because no one was really interested in the model we were pitching. Doctors want more patients, not an efficient office.”
At the end of the day, business is business. It is purely market-based, ruthless and even unfair at times.
Dreams and visions can take you that far. Inspiring others does trigger the sales process. Yet strength comes in numbers. So does success.
Master the art of listening
That’s right. Just listen to what people have to say about your solution. As early as possible. Get feedback from your product’s potential buyers.
No, not your friends and family. They will definitely love it and say you are heading for success. Or even worse. They won’t have the heart to kill you with the bitter truth.
It’s better to try to get feedback about your product before it is done and goes live. You’ll save a fortune and lots of time this way.
Create a landing page, make a demo product, try to reach out to your potential clients and show it to them, collect the feedback, use the critique to create MVP (minimal viable product) and present it to your clients again to see if you hit the mark.
Fact-based data will help you to define the priority features of your IT development product. Focus on them. Start your product from stuff that is majorly relevant to your clients, not your ego.
Killer #2: Not enough romance
Think like your customers. The best way to think like one of your clients is to be one of them. If you create a product to help yourself solve a problem, because the solution is missing or not good enough, this means:
- That the problem exists (many startups create innovative ideas for solving problems which don’t exist or aren’t big enough).
- It will be easier for you to understand what your customers’ needs are because you are one of them.
Love your customers! Today, business is not so much about products and services. We’ve got plenty of them. Start-ups are all about delivered experiences and emotional connection with clients.
If you feel that a company loves you and takes care of you, you won’t churn, right? Some say it’s not about brands anymore, it’s about lovemarks.
Don’t believe me? Go ahead and tell your friend with a MacBook that Apple sucks and Microsoft is way more awesome. I dare you. I double dare you.
And don’t forget to grow along with your customers. Technologies, trends and demands change every day. Keep up with them, correct your mistakes and don’t stop evolving.
Killer #3: Keep a finger on your wallet
29% of startups fail because they are short on funds. You can manage money without specific troubles via mere common sense and basic business knowledge. Here are 3 tips, just to name a few. You’ll surely use more.
- Keep tabs on your revenue. Are you earning money? Are your customers still with you or have they left for pastures new?
- Make sure you make profits not just on paper, and the cash is real.
- Prioritize and allocate resources smartly.
While all this seems as simple as cake, an average company dies in ~20 months from its last funding round. Reason: absence of additional funding.
So If you feel that you may be running out of money, start looking for additional funding sources, or find ways to cut costs.
Killer #4: Your team’s capabilities are amazing, or are they?
Do you have skilled and qualified people on your team with varied skillsets to cover all the key aspects? Experienced investors often take this into account when choosing whom to back.
- Startup’s team is its most valuable asset. Not money, but people!
- Don’t put all of your eggs in one basket. It’s true that a smart, experienced investor can give you a hand with business development, networking and marketing. But investors often show more interest in you if you and your team can handle everything on your own. Giving you a hand should just level up your business, not build it from scratch.
- Besides, money from angels comes with a price – less control over your beloved brainchild.
That’s why investing most of your effort into your team is your number one priority.
Killer # 5: Plain old competition
Before launching, do your homework and research the market. Is your product unique? What is its selling point? Will it withstand the competition?
Look out for factors that will make you fail the competition. Your product may be super innovative, but if it’s hard to use no one will buy it. Ever.
Competitive analysis is, by far, the best way to understand if your IT development idea is worthwhile. It may lead to radical changes in the product’s scope.
Changes people will love. Analysis will allow you to channel resources into the right direction. The direction where every other competitor is weaker than your idea.
Blue ocean products (the ones without competition) are a must if you want to create a better product than your competitors.
But remember, if there isn’t a thing apps can do in 2016 maybe there is a reason for it?