How To Kill Your Startup 101
Hey there!
Team Magic Factory here.
And today we’re going to tell exactly what you need to do to kill your startup and eradicate all its chances of ever scaling up and making it big in the shark tank.
Did you know that 9 out of every 10 startups fail? But don’t let that stop you from trying because research shows that failed startup founders have a 20% higher chance at succeeding in their next venture. But do you have to fail to succeed? Not necessarily because, knowing what to do might be important, but knowing what not to do is even more important.
In this article, we’ll be listing down 3 of the biggest startup killers to help you navigate around them by gaining the experience of failed startup founders without actually going through the frustration and dejection of killing your new venture.
Here are some of the critical mistakes that collapsed startups have made and the reasons why they were so deadly.
Untimely Launch And Incorrect Product Market Fit
When a startup decides to run with a product which has no actual need or demand in the current market, it immediately sets itself up for failure. When there is no market for a product, no matter how great the product is, you will simply not be successful. Moreover, timing is everything if you launch your product at the wrong time or when the market is not ready for it, you will undoubtedly fail.
Friendster, for example, was the very first ever live-streaming platform but it was rushed into the market long before the world was ready for it, had it waited for the perfect opportunity to go into launch it wouldn’t have been overshadowed by Facebook and Instagram.
Not Listening To The Customers
Guess what? The customer is always right. They’re either going to make you or break you. Ignoring them is the best way to kill your startup. Researching, collecting and analyzing customer data is absolutely crucial. In fact, feedback from real customers should never be taken with a grain of salt. Their opinion is the bible and every product iteration should be made, in accordance with it.
Blockbuster for instance, which once used to be a very successful movie rental enterprise fell flat on its face, due to its blatant ignorance of customer needs. What blockbuster failed to understand was that, as technology progressed people started expecting greater ease of usage from them. The customers simply did not want to leave their home, to go rent a movie because it defeated the whole purpose of staying in for the night. However, that’s exactly what Netflix understood and capitalized on.
It is clear from this example that those who don’t take the time to conduct market research and blatantly ignore customer feedback succeed in killing their business.
Mismanagement of funds
Mismanagement of startup funds is a quick and efficient startup killer. According to a 2020 startup failure rate report, “Companies that failed due to mismanagement of funds typically have many investors involved, and passed several investment rounds.”
Just acquiring funding from investors won’t assure you success, because most failed startups had already acquired adequate funding, what they failed to do was manage it correctly.
For instance Wikimart, a Russian e-commerce platform had managed to raise $81M funding, but due to gross mismanagement of funds, it was forced to shut down. Hence it must be noted that in order to ensure your startup’s continued survival and growth, financial planning and a good revenue model is absolutely imperative.
Tackle these killers, with our expert remote developers who are hand-picked by pioneers in the field of startup scaling. Engage the benefits of immersive participation, short feedback loops and lifelike collaboration through us to navigate against the strong currents of the unforgiving business world. Let us be your startup’s life raft, and we will vow to revive and ramp up your startup’s scale-up efforts.
With a promise to give your startup the competitive edge of a unicorn
Signing off,
Team Magic Factory
