“Failure is simply the opportunity to begin again, this time more intelligently!”
– Henry Ford
The majority of start-ups fail because they offered something that nobody wanted, or at least, that nobody wanted at that point in time. It’s important that as a start-up, you have that ability to bend and shape your products or services around your consumer. Create something that people actually want, as opposed to what you want them to have, or what you think is “sure to take off!”. There’s no evidence that it will take off and you can’t be sure that it will succeed and that’s simply because things change – markets become over-saturated and unforeseen circumstances (such as viral pandemics), can become a catalyst for unwanted change across all forms of industry.
Research Your Target Market
Market research is crucial to getting your product off the ground. You should never underestimate how important it is – in fact, the reason why successful businesses are successful is because market research it’s a huge part of their business model. Conducting regular market research helps you to better understand your target market, how big the market is, identify consumer problems and pinpoint who your competitors are and what they’re doing right.
At the same time however, market research doesn’t need to be an exhaustive process. One of the great things about UX research specifically is that it can be conducted at speed through rapid fire workshops or during a design sprint!
Focus on the Problem
You start a business to solve a problem – to better or enhance the quality of people’s lives. It’s not just about pursuing something for which you have a strong passion. It’s important to be passionate, but also to understand and focus on the problem you’re trying to solve, the value of the service you offer and whether there’s anything you can do to maximise its potential.
Too often, start-ups will lose sight of what they’re trying to accomplish. They get so caught up in the excitement of establishing a new product that they begin to neglect their main objectives and spread themselves too thin.
Once you’ve done your market research and have a better understanding of the problem you’re trying to solve, it becomes easier to define a minimum viable product (MVP) for your company. You should always start small – something low-cost that satisfies early customers and creates a great source of feedback for future product development. The aim is to achieve a basic proof of concept in order to demonstrate feasibility, before ploughing lots of cash in to create a more polished final product.
As a start-up, there are obviously things that you should be spending your money on, however it’s important that you can differentiate between necessary spends and non-essential purchases. Start-ups that have failed due to a lack of capital most likely found themselves in a situation where they were making too many unnecessary purchases too soon.
Studies suggest that up to 70% of start-ups fail because of premature scaling. The obvious objective for any start-up is to no longer be a start-up, but it’s important not to scale too quickly. This can be anything from hiring more staff than you need (or can afford), adopting too many poorly managed business models, or taking on too many projects that result in operational inefficiencies.
It’s important to recognise the right opportunity to expand and scale, rather than expanding because you’re eager to get the ball rolling. Think about scaling your business at the stage where your customer acquisition cost is lower than their lifetime value. At this point, you’ll start to see that natural exponential growth that you were hoping for from the offset.
What Makes Your Product or Service Unique?
It’s important that you’re also considering how your products differ or better those offered by your competitors. It’s crucial that as a start-up you’re keeping up with innovation – staying ahead of the game so that you have that edge over the competition.
What makes you stand out in a crowded market? Does your product offer something that your customers value but that your competition lacks? Think about whether your product has a broad appeal that could potentially be replicated by the competition. What you don’t need is a much larger company entering your market and underpricing you, simply because they can!
Naturally, your product will require several revisions here and there before the product-market fit is right. It doesn’t happen overnight and it’s important that you’re not rushing to that next phase in your life-cycle earlier than you need to. Spend some time trying to understand your market, keep track of your expenses and continually trial your MVP with real consumers that can offer you valuable feedback.
Product iteration can bring really powerful results, so keep testing, refining and empowering your company with real consumer-driven insights that will validate the decisions you make. Just remember – you may be in competition, but this is by no means a race!