Two Different Types
Here is the catch:
Many startups fail because they did not know how to reach out to the market. Still, John & Mary took their startup to another level and invested in social media, advertisement, and all available channels to get the new spread.
Even they got help from an agency to boost their online presence and help them become successful entrepreneurs and launch the next big startup.
As suspected, nothing happened! Are you wondering why?
Why do entrepreneurs fail?
The biggest problem is taking the linear approach to running a startup.
Then a new idea came to Mary’s Mind, and they added another feature to the product, Aha! That’s how it should have been. They set up a website and a bit more advertisement.
Hmm!, no result yet, and they spend their time adding another feature and spend on more advertisement until they broke and had no choice but to shut down the startup.
I think that’s enough. Believe me; this is the life of many startups that fail. So what’s the solution, and how can you become an entrepreneur? Before we get to the solution, let’s have a look at two types of entrepreneurs.
The First category of Entrepreneurs is “Idea Generators.”
This type of entrepreneurs have great ideas, and I mean the Plural form of Idea. The positive side of it is that they are innovative and capable of producing great ideas, but there is a downside.
As soon as they start working on one idea, another idea comes to their mind, and over time, they find themselves working on many ideas and literally producing nothing. S/he has no idea what is a business model or what business plan pattern they should follow to succeed.
One of the most dangerous situations for any entrepreneur and startup occurs when an Idea generator is not mature enough to hold on to one idea until the first one reaches a clear stage to measure its success.
The startup’s situation will worsen when the startup combines two immature entrepreneur founders, where one is an idea generator and another one is a Product Evangelist.
All existing records have proven that more than 3 out of 4 startups with that combination do not even reach the point to launch, let aside that their startup is unconsciously set for failure.
The other type of entrepreneur is called “Product Evangelist Entrepreneurs.”
Due to the lack of business planning skills and soft skills that every entrepreneur need to develop, the majority of the startups launched by product evangelists, sadly, have a huge chance of failure. These startups are formed by a group of “Technology-driven, tech-savvy, passionate entrepreneurs” who love to build things on top of another thing.
In fact, to become a successful entrepreneur, it’s amazing to have a good product; however, what causes failure is the illusion that your product can drive your startup to succeed. These startups produce products and services that have Lots of amazing features, and “Regardless of market feedback“, .new versions are released every month.
Indeed, product evangelist entrepreneurs are very interested in walking you through every aspect of the product and its features. Still, when it comes to monitoring market response, they are not that successful.
When it comes to Entrepreneurship, everyone can imagine to be featured in the Wall Street Journal and receive an invitation to speak on TED. The truth is that without a proper strategy, the dream of launching your startup and get a great hit is unreachable, and that’s why many times, Entrepreneurs fail.
Many entrepreneurs believe that as far as they have great ideas, amazing products, and resources such as customers and fund, they will be the next Uber.
If you are asking yourself,” What’s wrong with it? As far as I have a good product and Idea and money to sell the product, I am good to go; then read the secret behind successful startups because that’s an entrepreneurship myth!
Let’s have a look at 3 Startup Ideas that have shut down after a year, despite having fund, customer, a great product and a creative idea.
1) HealthSpot, a telemedicine startup shut down – Here is the story in News
2) Sidecar, Bought over by General motors as they could not compete against Uber
3) Pixable, a modern image search & editing startup.
That’s a piece of sad news for any entrepreneur.
What can you do to prevent your startup from failing?
Many startups like Mary and John fail because they have either no framework or a Broken Framework.
Starting your startup is not a linear process. It would help if you considered many factors such as market, Customers, Feedback, Strategy, Business Model, Promotion strategy, culture, and dynamics. Indeed you can address these factors in recurring cycles.
To become a successful entrepreneur in today’s market, you need to focus on 3 different components.
The first important element to become an entrepreneur is Your Business Model:
Unfortunately, many startups, investors, and business owners think that a business model is a document with hundreds of pages, starting with an executive summary. Most certainly should include a detailed 3 to 5 years financial forecast.
It pains me to say that many professors still teach the dated business models and business plans to MBA Students in many business schools!
I have clearly explained what business model should you use in today’s market and how can you craft your startup business model canvas.
The second Component that you need to pay attention to is your approach towards running your startup.
Lean startup has transformed the way startups are being formed, operated and succeeded.
I’ve clearly elaborated the lean startups’ framework and steps in another article. You can also find interesting essential techniques from Agile Product development to complement your Lean Startup strategy and your business model canvas. This helps you build your product faster and go to market with more confidence.
Last but not least is the set of amazing Proven promotion strategies that you need to spend time on and get your startup to the next level. The proven strategies That I have shared in this article work amazingly with Online and Offline strategies that get you in front of customers and increase your chance of success.