In recent news, Dubai has become the global startup hub, attracting more and more entrepreneurs on a daily basis. Thus, the growth of startups has accelerated, making it harder for budding entrepreneurs to stand out from the competition. We have prepared a digestible guide for you to understand why most entrepreneurs cannot sustain their startups for a healthy duration. There is unquestionably no survivorship bias present here. Still, there are several pertinent lessons for anyone working in the entrepreneurial ecosystem to pick up and learn from. Before you venture into entrepreneurship, make sure you know why most startups fail and how you can save yours.
Here are nine mistakes that could kill your startup:
1. No Defined Vision
This is where every entrepreneur should start, but more often than not, this is not the case. Too often, entrepreneurs jump right into their colorful solutions without pondering why they are operating the way they are or what they want to achieve. A startup may veer off-course without having a clearly defined objective. Without any transparency in the business, you won’t have much to rely on to keep you and your team going when times are tough. Not having a clear, set vision is one of the major why most startups fail.
2. Marginal Niche
A startup company may put itself in a quandary by adopting a niche. This is not the ideal strategy to avoid competition. Sometimes being very niche means a tiny population of people will want to buy your product.
The ideal product is straightforward, attractive, and consistent with the business model. However, even though certain websites and apps make their products look appealing from afar, they don’t offer a unique user experience from the inside. Try to fix a problem that a large population faces or suggest a solution that reaches the appropriate chord to be embraced extensively.
3. Wrong Platform
Once you make headway, your startup’s survival or downfall will largely depend on how quickly you can adapt and grow. If you set foot on the wrong platform, your company’s growth could be in jeopardy. People typically do not wait for you to realize this and quickly move on to someone else. Doing market research well in advance of launching and picking the right platform can avoid your startup from failing.
4. Poor Investor Control
Always prioritize your customers’ satisfaction over the happiness of your investors. If the customer is satisfied, your investors will inevitably profit. Put customers first—profits second.
As the saying goes, you can always earn money. However, the same is not true in terms of satisfying users. Make something they want right off the bat. And remember, chase customers, not investors.
5. Launching Too Soon
Quite so many startups spend months in “quiet mode,” hiding from prying eyes, and never actually release a product because they will doubt and rivalry will sabotage it. On the other hand, some, in classic startup spirit, release a subpar early prototype of their product. This is a concern and a major contributor to why most startups fail.
Setting up a new business comes in stages, which you should be aware of rather than making a hasty decision. Finding the perfect balance between launching early and delivering the ideal product is no easy task, but doing it right could be worthwhile. You should know that your initial release is merely the start, not the finale.
6. Obsessing Over Funding
Before developing anything valuable, raising too much money will probably make you feel like a tremendous success. The people you want to impress the most are consumers, not investors.
Nevertheless, you might not be able to develop your product to its full potential if you lack sufficient funding. Before you start collecting, plan how much money will be needed. The next round might be devastating if you begin overspending before you’ve gotten big enough to have the numbers to raise the next game. This could indicate that you are out of money, eventually leading to the company’s downfall.
7. Recruiting Poorly
Early-stage startups typically commit the blunder of recruiting employees before they have explicit knowledge of the individual they are looking for. Prepare yourself for the fact that you won’t find the perfect employee so soon. You have to experiment a little in the marketplace. But before you do that, ensure you have what it takes to hire and keep a good employee in the company. With a clear goal to work towards, no employee will choose to work till they are exhausted.
8. No Target Audience
If you don’t have a defined target market in mind but you believe that someone out there will undoubtedly be interested in your product, think again. You must lock down your target audience before setting up a new business. A crucial mistake budding entrepreneurs make is to think that regardless of what they sell, they will have customers. However, in order to understand why most startups fail, one of the most important parts is to make sure you have a target market to focus on and sell to.
9. Lack of Effort/Focus
Nothing is as easy as it sounds. You’ll only know when you get your hands dirty. There may be pressure from clients, shareholders, or other team members. However, you’ll need to learn how to say “no” if you want a functional product. Don’t bite more than you can chew. Make life much easier for yourself by getting the core right and setting your business priorities straight. Having employees doesn’t mean you don’t need to hustle. Have the same grit and focus as you did on Day 1. The determination to do well will take you far.
We hope this blog has given you an insight into the skillset you need to build to be a successful entrepreneur. If you are ready to venture, reach out to us because the real work starts now. Let us take care of your business license, office setup, and documentation while you work on building your empire.