By Maksym Babych, Founder and CEO of SpdLoadthe software development company for startups.
Starting a startup is not an easy task. Making the startup thrive is even harder. In my years of experience as the founder and CEO of a leading software development firm, I’ve noticed some mistakes most founders make, the most important of which are:
• Not analyzing your target market
• Launch your product too early
• Overlook hidden expenses
• Ignoring User Concerns
• Don’t seek help from outside sources
But before I get into the nitty gritty of these mistakes, let me enlighten you on the ideal thought process behind formulating a startup.
Come up with an idea for a startup
An idea is a set of business hypotheses put forward to solve a specific problem to target consumers to get financial rewards for the solution provided. The idea phase is critical to product development as it determines investor interest in your business and the viability of your startup.
Helping startups grow over the past few years, I’ve found that the most viable ideas are those that follow an idea development process, such as:
1. Hold brainstorming sessions with team members
2. Analyze each idea and assess its strength
3. Analyzing the Competitor’s Market
4. Streamline and refine the idea
However, it is not that simple as there are errors to watch out for.
Let’s discuss this too.
Common mistakes startups make
A recent Bureau of Labor statistic suggests that only: 80% of companies survive after a year. By avoiding the following mistakes, your chances of success improve dramatically.
1. Not Analyzing Your Target Market and Audience
This error can leave your startup with serious consequences which can be:
• Poor competitiveness
• Marketing to the wrong customer base
• Weak product demand
• Wrong business model
Early-stage startups should spend more time validating their target audience before launching a product. This will help them better understand the needs of their target audience.
2. Starting too early
Before launch, consider the following: Is there a market for this service or product? Are you ready to bring it to market?
If you answered no to those questions, you are starting too early.
The consequences of starting too early are:
• Poor user retention
• Recurring Errors
• Bad user experience
While it’s also not worth launching your product or service late, you can balance your timing by creating a service with minimalist features and narrowing it down to a specific niche or geographic area – this requires less financial and labor demand.
It also requires fewer features, so you can quickly develop a quality solution.
3. Ignoring multiple ‘hidden’ factors
Hidden factors are cost-influencing properties that are not directly observable and that influence the total price of developing and maintaining a product.
For example, maintenance costs are not easy to estimate as they vary with development team, tech stack and other factors. In addition to maintenance, the additional costs include marketing, updates, etc.
Ignoring hidden costs leads to the following:
• Higher financial stress
• Expenses that got out of hand
• Dissatisfied investors
• Bad Marketing Plans
• Unplanned downtimes
To avoid this mistake, hire a CTO as a service who understands the intricacies of your workflow and the hidden costs.
4. Not being user-oriented
Being user-oriented means that the product consumer is at the center of the development process. Here the startup prioritizes the needs and experience of the product users over the wishes of other stakeholders i.e. investors.
This error is synonymous with startups just starting out. Early stage start-ups tend to create custom solutions for the sole purpose of raising funds. This lack of user-centricity creates a myriad of problems, including:
• user dissatisfaction
• Poor retention rate
• Low usage
You can avoid this by conducting pre-launch surveys about your product and incorporating user feedback at all stages after development in a timely manner.
5. Ignore outside help
External help is help obtained from outside your internal team. This help can come from the government, hired consultants and mentors.
Problems arising from ignoring outside help include:
• Easily avoidable mistakes
• Unscalable business model
• Poor growth
Mentors are a good and essential source of guidance for budding founders, as they provide experiential advice that can help them achieve their immediate and long-term goals.
Now that you’re familiar with common mistakes made by startup startups, what tips can help you with rapid growth?
Tips for starting a startup
It is best to keep the following tips in mind before and during the boot launch:
• Have a marketing budget
• Find a reliable partner
• Intelligently interview potential employees
• Create an MVP before launching a full product
• Use a reputable monetization model
There is a good chance that your startup will achieve significant success if you apply these tips.
Based on my evaluation of the stats, startups have about a 20% chance of success, and these statistics show that early-stage startups are at high risk of failure. This high failure rate is due to several errors, which have been discussed in this article. However, if you create an adequate budget plan, hire the right skills, and adopt an ideal business model, you can increase your chances of success.