In the world of entrepreneurship, the word “startup” almost conjure a home grown genuine feel. With the current economic downturn in Calgary, startups seem to be more prevalent then ever right now, as laid off employees are turning to long formed side projects to grow into income providers. Unfortunately, the stats don’t play in favour for startups. 90% of them fail, and do so in their infancy. Why is this a fact and how can you be in the 10%? First you need to acknowledge the common mistakes.
There are lists out there that point out hundreds of reasons, but for this blog’s purposes, we are going to highlight the big ones.
Not knowing your market
This is a big one that encompasses many angles to consider. Not only is it important to know your actual market so that you have a target to reach out to, but it is also important to acknowledge whether or not you have a place in the market. Honesty with yourself here is key – you may have a great start-up idea, but if the timing isn’t right, the market can’t be receptive so even the best ideas will flop. This also means knowing your competition. Critically think about their strengths and weaknesses so that you can analytically figure out if you have a chance against them. Know your market.
Not enough funding
We all know the adage ‘you have to spend money to make money’. Knowing where to get that money from first is key. Investors often expect a return, buy in, or some sort of success. This is a great way to put the pressure on if you know that the market will be receptive of your idea. Grants and seed funding programs are a great way as well though, with less strings attached. Once funding is secured, spending it the right away is crucial. It is necessary to contemplate all compensation of the possibilities that can occur from spending funding different ways. Putting all of your eggs in one basket – spending it all in one place – is probably very risky, but spreading the funds to thin might be tricky too. Set goals, targets, and stages of growth so that you spend funds with consideration, minimizing the need for bailouts.
The wrong team
Now more than ever, you need to surround yourself with individuals that have the same vision and drive that you do. This could be the hardest part. Finding people your startup aligns with, who are willing to be risky, bring tremendous benefit and skill to the table, and for very little in return for the first while might seem impossible. But if you get hooked up with someone who wants to take things in a different direction for different motives, it could spell disaster. Be selective, but not restrictive. Be mindful to network and reach out to people you know that could help you.