4 Common Mistakes That Derail Startup Success

February 3, 2016

Today's post is by guest author Jeremy Sutter. Follow him on Twitter.

At the end of the day, the number one reason 90 percent of startups fail is because they don't make something that a user wants. For the most part, a business will be fine as long as they're delivering to their customers, but that path is riddled with obstacles. These four ways are some of the most common reasons that startups fail--both in service and at the bottom line.

1: Found a Startup with One Person

While there's certainly nothing preventing a one-man operation from succeeding, it's more common for a successful startup to work under multiple founders. Even a company that might have an individual "face" for a business, such as Oracle, you might be surprised to learn that more than one person helped found the company in 1977.

Consider the scenario of the single founder: For one, it seems like he was unable to convince anyone to join in on the venture, which is already a red flag for whatever he has to offer. Even if the service is solid, there's still the fact that he's just one person left to deal with all the scary, unknown variables involved.Moving forward with a startup business is daunting, even if you've done it before. Without some sort of regular advisement, you're left to second-guess yourself the more things become challenging. A business owner second-guessing himself doesn't look very confident, and if he's not confident in the business, why would anyone else be?Of course, a balance is still necessary since arrogance has also failed companies in the past. The goal is to project confidence and positivity onto your brand while building relationships.

2: Maintain Poor Physical/Online Presence

Depending on the industry, having to select a physical location may not even cross your mind, but those who do will need to research the right city for the service. It's no accident that major cities have become hubs for fresh startup companies--it's the same reason that they also flourish there: It's where the people are.

Establishing your presence on the Internet is of even greater importance, especially for online-only startups. Social media is critical to building your brand, and far too many startups avoid getting started. Depending on the industry, the exact platforms you'll want to gain a presence on will vary, but you'll find most reputable companies on Facebook and LinkedIn at the least.Regardless of the platform, the goal is to add consistent personal value. Getting an account isn't enough on its own; startups adding a few tweets and posts expecting to get customers without extra effort will also fail. In this respect, it's a good idea to think of social media like a slow-cooker rather than the microwave--sure, it takes longer, but it's a much more satisfying meal.

3: Schedule a Launch Poorly

Failed startups always claim an excuse for having to delay the launch. While some problems may be legitimate, most are the same ones that everyone uses to procrastinate anything else in their personal lives. Waiting too long for a launch can result in biting off more than you can chew, and failed startups have often built too much than necessary.

However, it's also just as dangerous to launch your product too fast. Getting a product out too quickly can be like serving the wrong types of insurance; it could be inconvenient at best and outright dangerous at worst. The unfortunate reality is that there's no way to be 100 percent prepared for response until it's launched and you're getting that feedback.The trick is knowing what you need before confidently beginning a launch. A startup with a plan should have a product or service that is considered useful all on its own while also being able to be further expanded in the future with later updates or future products. At this point, it's time to launch.

4: Sell to No One in Particular

It's not possible to build a user base without knowing who they are.

Many failed startups have a common problem among them: They've chosen an obscure niche that will cater to a specific, demanding audience in the hopes that there won't be any competition around to fight. The only way to avoid the competition, however, is to have a bad idea.Others try to be too broad, much like Under30CEO started out. The company first tried to be an all-encompassing product before eventually going modular, creating different products for specific demographics, such as Under30Experiences.When you're designing a product or service for users, you must be empirical and avoid guesswork. You must measure the feedback of your desired users if you want to make something for a target audience that does not represent you. If you're unable to talk to that target audience properly, then you might wish to reconsider your goal.As previously stated, many startups will fail when they can't deliver a working service to the right audience. It's just like anything else in life: The worst thing you can do is fail to try.

February 3, 2016
Karen Houghton