NOVEMBER 2024MARTECHOUTLOOK.COM19Observations and StatisticsThroughout my decade of experience working with startups, I noticed that more than half of startup failures can be attributed to two main reasons. My observations are supported by research conducted by TechInAsia, which noted that 34% of startup failures can be attributed to a lack of product-market fit and another 22% due to marketing problems.That is why I started 2 companies to solve these problems. Meet Ventures (meetventures.com) was founded to help startups achieve product-market fit and increase their chances of success. HT Ma rketing Agency (HTMarketingAgency.com) was founded to help businesses to scale in an effective and affordable manner after they have achieved product-market fit.Achieving Product-Market FitA wise man once told me that "First-time entrepreneurs focus on product. Second-time entrepreneurs focus on money. Third-time entrepreneurs focus on customers.". Throughout my career, I found the above saying to be very true. Many first-time entrepreneurs fail because they focus on building a fancy product that nobody wants. By the time they noticed it, they have already run out of cash and are forced to close their business. The mistake they make here is to assume that customers are willing and able to pay for their product.Here are two scenarios to illustrate how many first-time entrepreneurs fall into the trap of making this mistake.Scenario One:1.Startup founder thinks of a new product idea and immediately proceeds to invest tens of thousands of dollars into product development.2.They later find out that nobody really wants their product.Scenario Two:1.Startup founder thinks of a new product idea and asks potential customers if they like it before proceeding to invest tens of thousands of dollars into product development.2.They later find out that although some potential customers like their product, none are willing to pay the price for it.In both the above scenarios, the startup founders failed to accurately determine their potential customers' willingness to pay and ability to pay. This resulted in them exhausting their cash reserves to build a product that nobody wants. The solution to this is to conduct proper market research and to ask potential customers the right questions before investing in product development. It also helps to have a business mentor who can help you to navigate through the early difficulties of building a startup.Overcoming Marketing ProblemsSecond-time entrepreneurs have usually learnt their lesson and now focus on activities that bring in the money. They have understood the importance of cashflow and managing their finances properly. However, they might not be able to grow to their fullest potential if they do not have a proper understanding of their unique selling proposition orif they do not adopt proper marketing systems.Scenario Three:1.Startup founder thinks of a new product idea and asks potential customers to pay a deposit or sign a letter of intent before proceeding to build a minimum viable product. 2.Once the product is launched, full payment is collected from their early supporters and the startup eventually achieves profitability.3.However, due to stiff competition, the startupfinds it difficult to scale beyond a certain size or expand out of their local market.In the above scenario, the startup founder has managed to overcome the birth pangs of founding a startup. The challenge now is to identify a niche area where it has a competitive advantage and invest in marketing to grow its market share. There are two possibilities if this is done properly. The first By John Lim, Partner, Meet VenturesHELPING STARTUPS TO MINIMIZE THEIR RISK OF FAILUREJohn LimCXO INSIGHTS
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