Do you have a startup? Are you worried about your finances? Unsure of your future prospects? Then you’re not alone. Most entrepreneurs go through the same process and have similar beliefs and experiences.
But there is an alternative reality. Some startups (very few in number) face fewer problems managing their organizations and organizing money from various sources. Why do some succeed and others don’t?
Successful startups are those that do not make the following mistakes:
1. Not getting feedback
This is a big mistake. Feedback is an inevitable part of the business. It is more important for startups. They must have a stable system at work to collect feedback from their customers, potential customers, and also from random people.
Most businesses value customer feedback and even employ online tools to aggregate reviews from satisfied customers so they can brag about themselves.
Allowing random people to test a product and give feedback may seem like a strange idea, but feedback from random people is generally honest. Such feedback provides the brand with a glance back at its product ranges.
2. Considerations for Hiring
When recruiting an older employee, the late Steve Jobs stated that he looks for competence. It’s not that young people aren’t capable; they just have different priorities.
It is “controversial” to link a person’s age to their value as an employee. But there tends to be a link between age and one’s abilities with specific tasks. Take Millennials as an example. They generally have more exposure and heavier use of online tools, make it easier to study at universities, for example, by turning to essay service sites, so they generally have skills and a broader range of skill sets than older team members. The mature employee may lack technical knowledge, but they make up for the general experience.
You put people where they will excel and serve the organization best. If your millennial employees are tech-savvy and strong in social media, and your more experienced employees are not, make sure their skills match their assigned tasks. Don’t force a less experienced team member into a strategic or managerial position if they’re not ready. Conversely, don’t try to force a less technically comfortable team member with ‘traditional’ ways of taking on your social media efforts.
3. The customer as a salesperson
Have you ever thought about this strategy? Probably not. Making clients a part of the sales process, on the other hand, is a significant error that you can’t afford to do as a beginning operator. Startups often don’t have enough resources. For example, they may not hire ten people right away to take over the sales department.
But they can treat each customer as a special customer, so the customer then endorses them to others. Jerry Murrell, CEO of Five Guys, suggested this strategy. Startups may significantly improve their ROI by implementing this method. They don’t have to pay anything, and they just deliver a winning product experience to their customers.
According to studies, client testimonials are more helpful for startups than established firms. People doubt the authenticity of consumer reviews or testimonials if they endorse big brands.
Dismissing strategies
This is another mistake that startup owners are guilty of making, eight out of ten (quote this or change it to “many”). They often discard strategies quickly, without giving them enough time to positively impact sales.
There can be several reasons behind the failure of a strategy. The right approach is to try to identify those reasons first. Make changes to the conditions surrounding the implementation of the strategy and see if there is any difference in the outcome. Sherlock Holmes used to do that to identify the culprit. Following in his footsteps can help you identify bottlenecks (if any).
If there is no external factor preventing the strategy from proving its effectiveness, it is the strategy’s fault. That is when you may abandon the approach and implement a fresh one. Most startups don’t go through these stages, as they are unwilling to wait. Once they see that a strategy is not giving them a favorable return, they discard it.
4. Looking for cheap customers
Startups sometimes settle for low-cost consumers; their argument may appear persuasive, but it is not. The fact is that startups are desperate for clients. Therefore they don’t discriminate or accept anyone. They couldn’t target or wait for large clients because they just had basic and limited resources.
But chasing cheap customers has its downsides. First, cheap customers don’t pay much, and a startup’s operating expenses are huge during the first few years. Most of the money startups receive from their customers is spent maintaining their operations. They could not save much, and their finances did not grow.
Furthermore, when they work for low-paying clients, they produce low-quality work. It’s not that they purposefully keep the quality low. They cannot assemble sufficient resources due to a lack of cash, and the quality falls as a result. Worse, customers frequently do not complain and simply leave. When they do, the startup maintains the flaws that pushed the consumer.
5. Poor management
One of the reasons most startups fail is that they can’t manage their businesses well. Their approach to management is often wrong. On top of that, they could not separate the company’s management from the management of their customers.
Client management is simplified since clients expect high-quality work and regularly want to know the status of their projects. But internal workflow management is a whole different ball game.
The same person handles both functions in many startups, which is a mistake. Ideally, the two should be handled by separate individuals. If a startup finds it costly to hire two people, the existing manager should be in charge of the client management / internal workflow management work, and the owner should handle the remaining work.
6. Avoiding Mistakes
The mistakes discussed here reduce a startup’s growth and prevent the company from assessing where it stands in terms of growth prospects, financial stability, and customer satisfaction.
As startups avoid mistakes, they find many opportunities for growth and gain reliable information about themselves.
