Avoiding Start-up Failure

90% of start-ups fail. Let that sink in for a minute.

When 9 out of 10 entrepreneur’s visions fall flat, you have to wonder how many of the reasons were inevitable, and how many were completely avoidable.

Why do they fail?

These issues look mostly isolated, you can’t possible address all these points in one go. But the truth is you can, it just requires taking an approach to product development that is shaped by the consumer. In short, becoming user-centric!

This means understanding the user needs better, addressing real pain points and prioritising what you know the customer wants before what’s “sure to take off!”.

Is it a 100% guarantee of better products? No, everything from market saturation and viral pandemics can mean you need to pivot away, but they can certainly increase your odds of delivering your start-up’s successful first product or service and keeping failure at bay.

Read on for 4 ways start-ups can avoid failure by putting the user first.

1. Research Your Target Market

Basing your first product as a start-up on a hunch rather than any tangible data is the fastest way to reach failure. 

Research gives you a leg up, giving you starting blocks you can use as a foundation for whatever you build, based on what the market (and users in that market)

By harnessing existing research and conducting regular market research, you can:

  • Make product decisions based on a better understand your target market
  • Use data like how big the market is to appropriately build customer personas
  • Build features and MVPs focused on the biggest customer problems
  • Define your USP
  • Pinpoint who currently tries to solve the problem, what they do right, and importantly, what they’re missing

And that’s just some of the points!


Here’s how you can conduct market research –

It’s worth knowing that although you can collect a vast amount of market research, it 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 where your teams can share expertise internally about the market (e.g. talking to your marketing team about the landscape), and even conduct some preliminary data gathering on the target audience through interviews and focus groups. This doesn’t need to be on your product, but can be on your target audience or even competitor products.

Once you’ve unearthed this raw data, you can focus on what this means for a future product and begin defining the questions you need to answer in your prototypes.


A workshop we ran where the team reviewed interfaces that solved similar problems

2. Focus On Solving The User’s Problem

Business is always about making money, and to make money, you need to solve a problem or meet a need.

Unfortunately, a lot of start-ups in an effort to make the money faster, go off to solve a problem they don’t entirely understand or for sure know is a big enough problem, resulting in bad products and wasted resources.

Why does this ultimately happen? The start-up loses sight of the customer and their problems.

Using user-centric tools like market research alongside existing user/persona data, you can best understand your target audience, dig into what their problems are (and how they feel using existing solutions), before building something the user will truly love using and adopt.


Here’s how you can focus on the user’s problems –

As mentioned in step 1, early user research with your target audience or users of your competitors can surface invaluable data you can use as a foundation for your product. But to validate if these solve the users problems as a start-up, you’ll need to do this as cost-effectively as possible.

We recommend starting with your market research and bookending the process with prototype testing at a later date. This allows you to validate your hypotheses and ideas early, before development/engineering eats into your start-up resources.

You could even do this during a design sprint, a five day process for tackling big product problems fast (Design sprints can be a great way for start ups to user validate concepts ahead of fundraising or prior to committing to development. Read 5 reasons why design sprints are perfect for start ups here.).

3. Start Smaller (Prioritise The Biggest Problems)

When you make decisions informed by market and user research, building your first MVP and avoiding start-up failure becomes easier.

But you’ve still got the challenge of build the right thing, that solves the right problem.

The rule of thumb is this: You should always start small and focus on the biggest question or problem.

The issue is, with resources tight and a not thoroughly defined scope, it’s tempting to attack every problem as fast as possible in one go.

The result? A greater chance of the start-up failing because the solution doesn’t focus on the biggest challenge, instead spreading attention across too big of a project.

This is awful news when your time and resources are tight as is.

That’s why being able to start small is important, allowing you to differentiate between essential and nice-to-have spends and empowers you to focus on the core functionality over features in the products periphery.


Here’s how you can find the big problem –

Identifying the big challenge can be tricky when you have a lot of priorities. But it requires one thing in particular, communication.

Siloed teams typically focus around one problem and share the same information (and biases) again and again.

We recommend taking a multi-departmental approach, bringing experts together to identify issues, map the user journey and vote on the biggest question that needs answering before building.

As a result, you can focus on prototyping something low-cost that satisfies early customers and creates a great source of feedback for future product development, allowing you to see into the product’s future.


4. Iterate, Iterate, Iterate

If you’ve done all the below and have gathered initial user feedback that gives you the thumbs up, you may think going you need to put your foot on the gas and get the product out.

We disagree.

More often than not, an initial trial of a concept, although a positive indicator of future success, doesn’t tell the full picture.

That’s why product iteration is critical to user-centric companies. Iterating on existing ideas, fleshing them out further, testing new hypotheses and gathering more feedback can help:

  • Polish the existing idea further
  • Build up a stronger bank of user feedback to implement
  • Identify any concerns that have yet to be addressed

There are a few counter arguments to conducting iterative product development:

  • “It’ll cost too much”
  • “It’ll take too much time”
  • “It’s already perfect”

However, iteration can be scaled in a way that is achievable in just 1 week (acceptance of feedback to delivery of new user feedback through the design sprint) and it ultimately reduces the risk of failure consistently, meaning a lower chance that your start-up ends in failure.


Here’s how you can iterate faster –

Iterating on an already launched product is too late and significantly more expensive than if it was done on a codeless phase of the project.

That’s why we recommend prototyping and testing solutions through interactive design, e.g. in Figma, to create an interactive prototype. This is because:

  • It’s quick to change
  • Doesn’t require overly specialist knowledge to do
  • Is low cost / high impact

You can then test this with your target audience, gauging how they navigate, their thoughts on specific features and more.

Iteration can then be done to further refine on any issues to improve user experience and the likelihood they’d adopt it long term. Product sprints are excellent for this, allowing teams to build on feedback and iterate over the course of a few weeks to deliver a highly polished, user-approved product.

In Conclusion…

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!

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