In entrepreneurship, failure is statistically more common than success. In fact, according to Forbes around 90% of all startups will see failure in the short to medium term. This figure is in no way meant to be a deterrent to new entrepreneurs, but rather a lesson, and a way to learn from the failures of all those who came before. Small Business Trends report that the top 10 reasons startups fail include ‘no market need’ (42%), ‘ran out of cash’ (29%), ‘not the right team’ (23%), ‘get outcompeted’ (19%), and ‘pricing issues’ (18%).

These statistics serve as a timely warning for those chasing the startup dream purely for personal glory or vanity. Starting your own business can be a turbulent, but rewarding journey and it is important to ensure you stay on the right path, and kickoff your business the right way.

 

1. Understand the Difference Between a Pain Point & Motivation

A pain point is a problem that a user or customer is actively looking to solve. Motivation is the desire to reach an end goal. The difference between the two is that a pain point can be described as a customer ‘need’, while motivation can be described as customer ‘want’. It’s crucial to differentiate between the two when deciding upon a product or service offering. Building a business model around solving a problem will dramatically improve a business’s chances of success. This is because a customer’s desire to fulfill a ‘need’ is greater than their desire to fulfill a ‘want’, hence customers are more likely to go out of their way to actively attain your offerings. It’s vital to understand the difference so you can properly assess how strong the demand for your product or service will be.

 

2. Deliver the Simplest Solution to a Problem

Despite your greatest efforts to make the first iteration of your product perfect, it’s likely that it won’t be. It’s imperative that you avoid having the mindset that ‘one more feature’ will make the product perfect, as this is a never-ending slippery slope. Ensure that the elements that provide the most value are included in your MVP, and keep it simple, focusing on making your core offering a great standalone product/service. Having this mentality is key to solidifying the foundation on which your product is built, as additional features are meant to add value beyond your core offering, not be part of the core itself. Product/service development is an ongoing process, one that will be made easier once you have more feedback, experience and funding on your side.

 

3. Act Fast

Entrepreneurs often face anxiety when going about starting their business. Whether it’s creating their business plan, selling to prospects, or settling on one core service. Procrastinating or delaying key business decisions won’t get you far. The best advice would be to act fast and learn from your mistakes. Seek out constructive criticism from peers and mentors and use it as a means to develop your business further. Change is normal, and there may be times when you need to move into a different business model, or change your idea altogether. Take this not as a sign of failure, but rather as an opportunity to further develop your niche. Seize opportunities to grow or develop, and do not hesitate to explore avenues that seem different or unfamiliar, as they may lead to success instead.

 

4. Develop Your Marketing Plan as You Build Your Product/Service

A marketing plan is supposed to link your offering with your target audience. Businesses that do not understand or cater to their target audience are guaranteed to fail. Build your marketing strategy in line with your product or service by researching and testing various ‘go-to-market’ models, as it may impact your product development itself. Working on these two interconnected streams at once will save you valuable time and money, and get you to a beta testing stage possibly sooner, and with a greater understanding of your demographic. Once established, a brand image tends to be difficult to change, so it’s more beneficial to know what the feedback and overall demand for your offering is before you go to market. This way, when you do decide to launch your product, you can be confident of the general market response, and plan the long-term strategy accordingly.

 

5. Hire Smartly

An entrepreneur needs to ensure that they build the right team for their startups. You need to find an appropriate balance between expertise and experience, rather than wasting someone’s abilities in the wrong role. Build an HR strategy, keeping in mind what stage of development your product is in, what your immediate goals are, and what skills or functions are crucial to achieving that goal. If the objective is to form a core team of executives, you need to prioritize filling roles that are focused on solving for and delivering your core product. Additionally, you need to ensure that people within your core team share your values and dedication to the business, to avoid any conflict of interest. Minimize costs by making your teams as lean as possible, hiring individuals who are already motivated and sold on the product or service you offer. There is a fine line between over-hiring and preparing for a probable forecasted increase
Your talent strategy should ideally be as specific as possible, even including the hours of work that would be required for a specific goal, to determine how many employees would be needed tp achieve it.

If you already have an existing group of employees, you need to set clear timelines and assess the work that they’ve completed in order to gauge their performance. This applies to all levels, from interns to C-suite executives. Regularly reviewing performance is the key to ensuring personal growth and being able to identify your teams’ strengths and weaknesses. If an individual is underperforming, understand why, and provide them with the resources necessary to improve. High turnover doesn’t work in a contemporary business landscape as recruitment a is time and cost heavy process, and finding replacements can be a very tedious and challenging endeavor, particularly when you are answerable to various investors and deadlines. Your brand is a product of your employees, and a negative brand reputation can spread very quickly, so it is crucial to be mindful of your talent decisions.

 

6. Keep Building Traction

As an entrepreneur, it’s important that you start building awareness of your business as soon as possible to every potential customer you come across. Promote your product through word of mouth prior to it’s development in order to gain traction and interest with your target audience. One suggestion is to implement a ‘soft launch’ to build a foundation for word-of-mouth and referral marketing, as this is a great and relatively low cost promotional tool for early stage businesses which can eventually lead to a higher rate of conversion. Building this traction plays an important role in the fundraising process and can prove to potential investors that you already have a demand for your offering. Showing this forecasted upward trajectory in sales builds confidence among investors and can support in creating a fair valuation for your business and securing investment.

 

7. Be Aware of Your Bias

Entrepreneur and author, Ina Catrinescu once said that “Confirmation bias is our most treasured enemy. Our opinions, our acumen – all of it, are the result of years of selectively choosing to pay attention to that information only which confirms what our limited minds already accept as truth.” Entrepreneurs should avoid framing data to suit their own views or agenda as this creates a conflict of interest. You might find yourself having a tendency to look at facts through a skewed lens. Misusing facts to support your own narrative is problematic because it then becomes impossible to objectively evaluate how successful your business can be. What we think is right is often based on everything we’ve learned from prior experiences, and not necessarily right for the current venture. It’s important to have checks and balances in place to maintain objectivity and this can come in the form of mentors, advisors to your business, partners or colleagues, who encourage you to question if your decisions are right for the business or just right for you.

 

8. Have the Right Advisors

Having someone you can trust, an advisor or consultant, be your objective voice of reason will be extremely helpful in securing the interest of your business. In ancient Rome, servants would stand behind their triumphant General during his victory parade and whisper “Respice post te! Hominem te esse memento!” Which translates to “Look behind you, you are a man!”, which served to ground their generals and remind them they were human. Maintain strong relationships with advisors who can act as your objective voice of reason, as this could be the key to remaining grounded. As an entrepreneur, the success of your business will rely on your ability to learn new skills relatively quickly, and be able to delegate crucial tasks to those that have more expertise than you. Therefore, it’s important to surround yourself with individuals who not only bring those specialized skills, but are also honest and straightforward in providing constructive criticism and advice when needed. Keep in mind the confirmation bias and do not seek out advice or opinions that solely confirm your beliefs. Pick your investors and your board carefully, as they play a crucial role in directing the growth of the business.

 

9. Understand What Investors Want

When preparing to fundraise, an entrepreneur must do their homework, research potential investors prior to engaging them, understand their mandate, startup portfolio, affinities and selection criteria. Investors are result oriented and want to see that you’re confident in what you’re talking about. Understand your product, industry and target market thoroughly and keep your pitch deck ready to go at all times. A good tip to keep in mind when pitching your idea is to maintain a balance between being professional and creating a light atmosphere. Investors have to listen to hundreds of pitches, and the best way to stand out is to showcase your product as well as your personality as an individual.

Be prepared to answer any questions that could be posed from the information on your slides. If possible, create a detailed plan that outlines your short and medium term goals, and make them attainable. Highlight the resources you will need to achieve each goal and the cost associated with this resource. Investors are more likely to buy in to your 18 month plan than your 5 year plan, as they would rather invest that unused capital elsewhere in the short term. As an entrepreneur you need to successfully prove that an investor will benefit from their investment. Lastly, do not panic if you are pressed on a specific topic or even antagonized. Investors may sometimes push you to find our more about your true character.

Creating a successful business from the ground up isn’t an easy task, but it’s always possible so long as you’re dedicated to seeing your vision through. The above steps are meant to be a guide that would help reduce your chances of failure. Even if you do fail along the way, learn from your mistakes and grow. Remember, there’s no such thing as “luck” when it comes to being an Entrepreneur, it all comes down to working hard and being prepared. When you work hard to be prepared for every foreseeable scenario, you’ll find yourself feeling a lot luckier. This is all down to you, because at the end of the day – behind every great business is a greater individual.