Getting a startup going is not an easy feat. In fact, an estimated 90% of new startups fail. From cash shortages to disharmony in a team to stiff competition, there are numerous reasons that startups fail, but the number one cause of startup failure is not solving a big enough problem.
Want to avoid the possibility of falling into the problem trap? Keep reading to find out how.
Have A Unique Value Proposition
Having a cool product or service that people want to try out versus getting a customer to actually commit to purchasing are two different things. To succeed at the latter, you’ll need a compelling value proposition. This entails keeping the end user in mind when developing your product and building utility into it that satisfies those needs.
Communicating your established value propositions loud and clear to your customer is also essential. Customers should understand the utility of the product and be able to come to the conclusion that they don’t just want it – they need it.
Make Sure the Market Timing is Right
In our ever-evolving world, timing is everything. If your ahead of the market by just a few years, chances are that consumers aren’t ready for your solution at this stage or it simply can’t be executed. For example, the smartphone app Shazam, which can identify the name and the artist behind the music playing around you, was actually founded by Dhiraj Mukherdee in 1999. There were no smartphones back then and the audio analysis software that was used took 15 seconds to process. The business didn’t cross over into profitability until 2016 when technology finally caught up in a way that worked for their advertising model.
By thoroughly analyzing the market you’re looking to go into and speaking to industry experts, you can get a feel for how ready the world is for your product or service.
Don’t Let Economic Downturns Deter You
Starting a business during an economic downturn can be scary, but you can’t let that stop you. There’s no “perfect” time to start a business and some of the world’s most successful ones were actually founded during recessions.
If you can get your startup off the ground in the current environment, you will only be stronger once the economy starts to improve. Businesses that solve problems during a crisis also tend to grow faster.
With these tips on how to avoid startup failure, you’ll be well equipped to make your ingenious idea a reality. And if you’re looking for a place to ride the rollercoaster that is entrepreneurship, look no further than Project Spaces. We offer flexible memberships at our coworking spaces in downtown Toronto. Book a trial at our coworking spaces and let us help you do what you do best!
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