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Five Common Mistakes Made by Startups

Startups are risky propositions so it’s important to avoid straightforward mistakes that can undermine all the work and time involved in building a business. From my experience with clients and conversations with startup entrepreneurs, here’s a list of five common mistakes. Feel free to add to the list by leaving a comment.

1. A failure to clearly articulate what they do, how they’re different and the key benefits (aka what’s in it for customers). Far too often, a startup’s struggles to attract users and the spotlight has a lot to do with its inability to provide clear differentiation and its raison d’etre. If consumers don’t quickly get what you do, they’ll leave you behind.

Some rules of thumb for messaging are making it simple to understand – make sure it’s something your parents can easily get. Effective messaging opens the door to deliver more information; it’s not trying to tell the entire story about what you do.

2. A product that doesn’t meet a need or, worse, doesn’t work well. At the end of the day, a product lets a startup thrive or fail. You can dress up a startup with slick marketing and build a community through social media but, at the end of the day, the utility and value of the product will be the most important determinant.

A product is not an idea; it solves a problem or a point of pain, makes life easier or better, provides a competitive edge, drives sales and/or profits.

3. Taking customers for granted. When a startup attracts a customer, it is the start of what could be a long-term relationship. It means the efforts to keep a customer in the fold start as soon as the “Buy” button is clicked. From that point on, there needs to be a constant focus on providing customers with reasons to stick around. It could be great customer service, a newsletter that provides insight or value, or a simple “Thank You” for being a customer. It’s all about showing the customer how much you value their business, and how you’re focused on meeting their current and future needs.

Marketing breaks down into three distinct cycles: pre-sale, during the sale and post-sale. Although each stage is different, they’re equally important.

4. Bad design and usability. A Website that’s not user-friendly and intuitive can submarine even the best products. Consumers are impatient and time-strapped so your Website needs to be a snap to navigate, and the service has to be perform in such a simple way that people don’t have to think much when using it. As important, there should be easy-to-understand instructions and tips along the way as opposed to assuming people know what to do.

Bad design will spark a quick click to another Website or service. Good design engages, captives and encourages more exploration.

5. Impatience to be successful. While overnight success stories are sexy, they’re anomalies. For most startups, traction consists of steady steps forward rather than huge leaps. There is a misconception that startups need to be successful right away when, in fact, a business can take time to evolve and gain momentum. Being patient also means a continual focus on improving and tweaking the product, experimenting and listening to consumers.

Building a business is a journey, not a race. Every startup progresses at its own pace; sometimes, it happens quickly, sometimes it takes time to get to the right place with the right product at the right time.

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  • Kristin Zhivago

    Great article, Mark.

    i would add, interview your customers after they buy – on the phone. Ask open-ended questions. Ask them what problem they were trying to solve, how they bought, why they bought from you, how it’s going, what they entered into Google (if they used search), what they would do if they were you, etc. Existing customers will tell you all sorts of things they would never tell you while you were selling to them; afterwards, they are more than happy to help you be clue-full and to be successful. Phone is better than any other method. What they tell you will enable you to repeat/support that successful buying process with your future customers, and keep you from “experimenting” with a bunch of stuff that simply isn’t going to work.
    Again, very nice piece.
    Kristin Zhivago

    • http://www.markevans.ca/ Mark Evans

      Kristin: Great advice. I find that when I do case studies for clients, the amount and variety of feedback is always surprising. Thanks for the comment. Mark

  • ega1

    Love your posts Mark, but when I tried to tweet, it was already at -12
    Shorter headlines make tweeting easier. I know you know that, must be the heat :)

    • http://www.markevans.ca/ Mark Evans

      Thanks for the tip!

  • http://twitter.com/asifmandozai Asif Khan Mandozai

    Great post, totally agree. One point I would add would be around motivation. To ensure it’s the right team for the particular industry. It would be wise for the team to utilize their passion for an industry to be able to persevere in tough times ahead.

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