5 Make-or-break Lessons For Every Start-up.
The road to becoming a unicorn starts with an idea.
You spot a gap somewhere, and your grey matter gets to work figuring out how to fill it. Then you get to shed a hell of a lot of blood, sweat, and tears, spend your own money or get some investment, and BOOM – you’re now the proud founder of the newest and hottest start-up around.
That’s the ‘easy’ bit.
No matter how much of your heart and soul you pour into growing your start-up from an idea into a small business, the stats aren’t on your side.
90% of start-ups fail. No, you didn’t read that wrong.
The good news is that 10% do make it - and yes, that’s partly down to luck.
But who says you can’t make your own luck? The most successful start-ups of recent years, like Airbnb, Monzo, and WhatsApp, certainly did.
There’s no failproof way to guarantee your start-up continues to grow and grow, even if you’ve already reached global disruptor status. But, by learning from others' successes and failures, it is possible to learn everything you need to know about how to succeed.
Lesson #1 – Find out if anyone actually wants this thing
When you’ve got what you’re convinced is a great idea, it’s easy to barrel into the design and production of a product you think is going to change your customers’ lives. There’s just one problem – your target market might not agree. It’s the top reason start-ups fail, being the chief cause of failure a massive 42% of the time.
Quibi found that out the hard way when, six months after raising $1.8bn in investment, they shut down due to a lack of subscribers. A short-form streaming service designed for phones sounded like a perfectly viable product – after all, if people are willing to spend hours scrolling through dance after dance on TikTok, surely they’d be open to some quality scripted entertainment? – but audiences had different ideas.
Dropbox, on the other hand, had a secret weapon. Back in the early days, before they could launch their software, there was a mountain of technical and financial hurdles that had to be overcome before customers could give their verdict.
The problem: The risk that years of development would be wasted on a product nobody wanted.
The solution? CEO Drew Houston whipped up a low-budget MVP. Dropbox’s Minimum Viable Product put the emphasis on ‘minimum’, consisting as it did of a simple 3-minute video of Drew demonstrating how Dropbox’s tech would work. When tens of thousands started flocking to Dropbox’s beta waiting list, it became pretty obvious that the demand was there.
And here at ReMake, we took our time making sure we had a product-market fit. The idea for ReMake emerged over years of delivering creative for the world’s biggest entertainment properties. Our front seat view of the toils, chaos, and delays caused by traditional content versioning practices meant that we knew there was a demand for a tool that would streamline the process - because we were part of the demand.
We built that tool, and the rest is history.
Lesson #2 – Make ends meet
Often, collapsed start-ups simply run out of money. 29% of the time, to be precise. It’s a tale as old as business - the product isn’t making dough fast enough, investment dries up, the whole thing collapses.
Even a big chunk of initial investment won’t solve your problems. Daqri, an augmented reality start-up, tore through over $250M in investment without making the headway needed to keep investors onside.
Happily, small businesses have proven time and again that, with some small changes, it’s possible to make a dollar travel that bit further. Back when Amazon was just a 10-person garage operation, just adding some tables into their packing process doubled productivity. Not every little start-up is going to grow up to be Amazon, but, these cost-effective ‘hacks’ can be found all over the place, from productivity-boosting software tools to energy-saving lightbulbs.
Lesson #3 – Get a quality team
For a variety of reasons, it turns out that putting together a formidable, diverse team to take a business to new heights is easier said than done. Fieldbook was part of the 23% of start-ups that cited failed hiring practices as the chief cause of their demise, with their co-founder lamenting the difficulty of attracting talented engineers to a fledgling project.
But quality is often better than quantity, and it’s worth remembering that there are gains to be made in output that don’t require an inflated payroll. Giving your existing teams the right tools can have a marked impact on growth. Deploying smart tools is a quick way to cover specialist skill gaps and amplify the capability of your existing team (annnnd if you’re in the marketing space, we’ve got you covered).
Not convinced? Just look at WhatsApp. They’re used by a whopping 2 billion people worldwide. Their headcount? 55.
55! That’s a ratio of 36 million users per employee, and all the proof you need that by staying small and nimble, businesses can scale up without needing to move to a bigger office.
Lesson #4 – Don’t ignore the competition
There’s a school of thought out there that paying too much attention to the competition is a recipe for disaster. But it’s a dog-eat-dog world out there, which is why 19% of failed start-ups find themselves outcompeted.
Sometimes it’s the inevitable result of a David v Goliath battle against established businesses. Sometimes it might be that someone knicks your idea, and does it better. Sometimes, the market space is just too crowded.
It’s a cruel twist – the better your idea, the more competition you’ll have, so staying alive means keeping a close eye on rivals. Like fashion, competitive analysis is never finished, and it’s key to working out what strategies, prices, and marketing are and aren’t working.
Lesson #5 - Keep in touch with customers.
Ignore the customers at your peril – as 14% of collapsed start-ups have found out.
Customers don’t care about your painstakingly composed business plan. If they want to rewrite the script, let them.
That’s what Monzo did. When their ‘hot coral’ card, originally designed just as a beta prototype, started drawing eyes in all the right ways, Monzo capitalised by putting the design front and center of their marketing and image, and they haven’t looked back since.
It’s a great example of a business model that puts the consumer at the heart of the business. By putting the customer first, any start-up can align themselves with their market in a way that makes everyone a winner – consumers get what they want, and small business can continue their supersonic growth.
Power up with ReMake
You’ve heeded the warnings – now learn how you can use ReMake’s content versioning and localization platform to fuel your start-up’s rocket ship trajectory while avoiding the pitfalls of others:
Find your market:
ReMake gives start-ups the power to check in with audiences at every step of the journey. At low cost and high speed, your team can create a whole rainbow of assets to test out your market, and have the ability to pivot on a dime.
Get more bang for your buck
ReMake is a small change (for small change) that makes a big difference. Businesses regularly increase content production 30x with ReMake, saving money that might otherwise have been spent on outsourcing. It’s a small change (for small change) that makes a big difference.
Improve your team without making a single hire
Never suffer a skills shortage again with ReMake. With a tool so brutally simple, there’s no need to find video editing experts or train new creatives. Instead, you can empower your existing team with software they can get to grips with in minutes.
Outrun the competition
With ReMake’s lightning speed, you don’t have to keep up with the competition. It’s your team that gets to set the pace with high volume, high-quality creative output.
Cater to your audience(s)
Keep in touch with your audience like never before. The high volume output made possible by ReMake means you can cater to consumers all over the world with high-quality, localized campaigns tailored to them.
Source: CB Insights - The Top 12 Reasons Startups Fail
