5 More Make-or-Break Lessons for Start-ups.
You’re probably going to fail.
Harsh but true, at least if you’re in the start-up business. The reality is that whether you’re a one-man-band working from a basement, or Silicon Valley’s most investment-friendly ‘gamechanger’, the numbers don’t tell a pretty picture when it comes to start-ups.
Last week we looked at some of the reasons that 90% of growth businesses collapsed – but we’re not done. Because the bad news is that history shows there’s no end to the variety of hazards that can trip up even the brightest, sparkliest, best-funded unicorns around.
But what can we learn from the start-ups that don’t make it? What about the ones that do?
There are plenty of lessons we can take on how to go from the unfortunate 90% to the happy 10%. So, without further ado, ReMake presents 5 more make-or-break lessons for every start-up.
Lesson #6 - Make sure the price is right
It’s the trickiest balancing act in the game – pricing your product high enough to cover costs, but low enough to actually bring in some customers. No one knows that better than Doorman.
Doorman’s mission to revolutionize parcel deliveries ended in vain back in 2017. A victim of their own success, the popularity of their promotional subscription offer meant they were quickly hemorrhaging money with every delivery. When they tried a course correction with significantly increased prices, their customer base collapsed, and that was that.
Not that it’s much consolation for Doorman, but they’re hardly alone - cost issues are responsible for 18% of start-up collapses.
But get it right, and the world’s your oyster. Back when it was just a fledgling mail-order service, Netflix’s penetration pricing strategy took down a giant.
By offering a subscription package worth just a little over $1 per DVD per month, Netflix pulled away customers from Blockbuster and soon took their place as the market leader.
Lesson #7 – Build cool shit
Even if you’ve got a great product, it’s no guarantee of success. A flawed product, on the other hand, is a one-way ticket to start-up oblivion.
ScaleFactor was flush to the tune of a cool $100 million in raised capital once upon a time but had ceased operations within two years.
The reason? According to Forbes, ScaleFactor’s AI-driven accounting software was compiling books riddled with errors, with the company forced to use manual bookkeeping and outsourcing to deliver what they’d promised customers.
A failed product doesn’t have to be the end of the road though. Long before it was the home of funny cat videos and hot takes, Twitter was but a humble podcast network going by the name of Odeo. Realizing that their product was somewhat subpar, Odeo’s founders gave themselves two weeks to pivot. Pivot they did, and #TheRestIsHistory.
Lesson #8 – Don’t skimp out on the marketing
When you’re wrapped up in building a business, with no marketing experience yourself, it’s understandable that it becomes a bit of an afterthought. But be warned - 14% of start-ups go under due to marketing mistakes.
Take Everpix. If they’d successfully positioned themselves as the world’s best photo start-up, they might have been ok. Unfortunately, that label didn’t arrive until The Verge was writing their post-mortum. Going up against the likes of Apple and Google, they had to get their marketing just right. Instead, they were too late. By the time they brought in a marketing specialist, the ship had sailed.
When corporate giants like Apple are setting the standard, maybe start-ups are bound to fail when it comes to marketing. The resources, budget, and skills required to compete on a global scale are surely beyond most start-ups. The ones not using ReMake, anyway.
Lesson #9 – Get your timings right
Maybe a competitor got their first. Maybe the stock market took a sudden turn. Maybe a once-in-a-century global pandemic sent everybody inside for two years. Sometimes, it’s just not the right time to bring your start-up into the world.
A slew of start-ups have gone to the wall, when, if they’d been a little quicker, or a little more patient, they’d have been fine.
Starsky Robotics is a good example of an idea that came about a little too soon. Their goal of bringing self-driving trucks to the masses soon hit a dead end when expected breakthroughs in AI tech didn’t come about quickly enough. Investor excitement soon fizzled out. Advancements that were once expected by 2020 are now anticipated to be another decade away – too late for Starsky Robotics.
Airbnb was luckier. Recessions aren’t typically a great time to start a business, but with homeowners on the lookout for ways to boost their income in the wake of the crash, Airbnb took off.
Lesson #10 - Stay focused
There are a lot of ways that a team can lose track of where they’re headed, and that’s where problems start to kick in.
Whether it’s too many big ideas diluting the overall product, intra-company politics, or investors overly keen to give their two cents, there is a myriad of distractions that come with running a business that can lead to its undoing - as an unlucky 13% of failed start-ups have found out.
Hivebeat, an events platform for students, fell into the classic trap of trying to do too many things at once. Listening to your customers is great, but not when it’s to the detriment of your product. By trying to implement all their customers’ suggestions, Hivebeat ended up with loads of features, but no vision to tie them all together.
Salesforce got it right. By focussing on one idea – making it easier for people to use software through the cloud – they built a user-friendly product that allowed them to outlast the dot com bubble. That initial success gave them the space to build out new features over time – not all at once.
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:
Tilt the balancing act in your favour
High costs are the biggest obstacle to smart pricing, which makes finding cost-effective solutions crucial. ReMake powers global campaigns whilst doing away with the need for outsourcing or large teams, so you can bring those costs (and pricing) a little lower.
The agility to pivot on a dime
Disaster strikes – Your product has flopped at market, but you’ve already committed to a big splashy marketing campaign. ReMake’s versioning technology means you can adjust your campaigns at a moment’s notice with brutal simplicity.
Take over the world
ReMake is the platform for launching global campaigns on a shoestring budget. When it comes to taking on giants, ReMake levels the playfield by empowering your team to spread your message around the globe without sacrificing quality.
Act fast
Timing is crucial. And when you realize the time is now, you have to act fast. The sheer speed and simplicity of ReMake makes that easy.
One vision
With ReMake, you keep control of your vision. Global campaigns used to mean local outsourcing, which made brand tone and message a hostage to fortune. The quick and easy localization enabled by ReMake means you can keep your positioning focused, streamlined and consistent.
Source: CB Insights - The Top 12 Reasons Startups Fail
