Although creating a startup is demanding, keeping it afloat is even a greater challenge. Those who keep up with the latest statistics know that the chances for a new company to succeed are approximately one in four.
In the erratic marketing landscape, there are 10 million startups established every year, 75 percent of which fail in the first five years. If you want to avoid such destiny and give your startup a boost, here are some of the most common startup mistakes you should avoid.
One of the main factors that ensure your startup's success is to have certain capital to get started. However, underfunding is still one of the major, even fatal startup mistakes that you can . Studies show that majority of entrepreneurs don't take this issue seriously and go into business with the money they got from savings, family, friends or banks.
Bricabox and Xmarks are a perfect example of why not to launch your startup without proper savings. Although both companies had pretty unique ideas, the lack of funds was their determining factor. A lack of funding is also what contributed to many of these top 50 startup failures of all time.
Lack of Structured Plan
Everyone knows how important having experience and a structured strategy is. Still, approximately the half of startups fail because they lack competence to develop a well-structured plan.
The recent IonLab's failure proves that building solid business plan plays an immense role in keeping your startup alive. Moreover, although they delivered technology, you can barely find any evidence of this startup on the Internet today.
Not Investing in Marketing
According to the recent research, 39 percent of American small-business owners don't invest in marketing. In order to expand and attract more traffic to their site, setting up a quality blog, sharing content via social media, and employing PPC advertising is a must.
For instance, Color was one of those startups that had a great product but poor marketing plan, which is why they failed to educate and engage their target audience.
Lack of Product-Market Fit
According to Fortune, one of the main mistakes startups make is that they make products no one wants. A pool of failed startups gathered by CB Insights determined that 42 percent of them identified the “lack of a market need for their product as the biggest reason for their failure.”
Ignoring Customer Needs
You don’t have to be an experienced entrepreneur to realize how important target demographic research is for your startup. On the other hand, the majority of startups get carried away with their idea that they put their customers' second, which usually ends up with unfavourable results.
The reference to this statement is the Devver‘s belief that their insufficient target demographic research proved fatal. “We made the mistake of focusing on engineering first and customer development second,” the company claimed.
All in all, if you want to stay out of the list of the startups that failed, you need to keep in mind numerous potentially fatal factors. For now, these 5 examples could be a great starting point for you to build a firm marketing strategy and avoid most common roadblocks.
Editor's Note: Due to some fact-checking error, an earlier version of this article incorrectly identified eHarmony as a failed company.