4 Common Reasons Why Startup Companies Fail You have a superb business idea. The question is – how do you know it will be a success? The answer is simpleRead More
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]]>You have a superb business idea. The question is – how do you know it will be a success?
The answer is simple – you don’t. And unless you try it out, you will never know it for sure. You need to take the step to find out whether your brilliant idea will transform into a successful business.
But before you take the step, be cautious.
The facts can be dampening – 8 out of 10 startups fail. But if you are aware of the common pitfalls, you can try to steer clear of them. Why exactly do startups fail? Often a combination of reasons works together and ultimately leads to failure.
“Only those who dare to fail greatly can ever achieve greatly.” – Robert F. Kennedy
Let’s take a look at the most common reasons why startup companies fail:
The idea may be too small, and attract only a small niche market, in which case you won’t be able to attract investors. Or, it may be the solution to only a really frivolous problem, in which case you won’t get customers.
Another possibility is that the product or service you offer really isn’t necessary, but only an addition to whatever is already available. In each of these circumstances, the possibility of building a successful new business will remain a distant dream.
Tip: The best way to assess the potential of your idea is to present it to investors.
Perhaps you miscalculated how much you may need, or you spent more than you can afford, or you misjudged the time you will need to break even, or maybe it was some other reason. Whatever it is, it can spell doom for a startup.
Also, if you want to run it as a lifestyle business, you may not want to involve investors. But this strategy won’t work if you want to build a big business. Running out of cash can forestall any chance of success, and eventually lead to shutdown.
Tip: Plan your budget; and double it. Also, keep aside an emergency fund.
Put together a directionless leader, an unmotivated team, and no advisors – and you have the perfect recipe for disaster! A startup needs a team with all the components right; and one that knows how to manage a startup.
You need to come up with a management that understands how to build up a new business, a team that works together with the same vision, mission and ethics, and advisors who can help overcome the hurdles on the way.
Tip: Don’t take it all on yourself; it will go haywire if you have to stay away for a week.
Unless your startup involves an original invention, you have to worry about competition, even in the first phase. Be it selling pencils or managing yacht charters, many new businesses are outcompeted by the established ones.
Again, sometimes your product may be too complicated to use, or your service may really be unnecessary. And customers prefer the time-tested solutions to innovations. If there’s a gap in your strategy, your idea may never become a successful business.
Tip: Do thorough market research, especially about your competitors, in advance.
A startup may fail for any of these, or some other reason. And even if yours does, it’s no cause to think of it as a failure and regret your step. Even Edison failed 1000 times before he came up with the light bulb.
Instead, analyze why you failed, and learn from your mistake. It’s the only way to success.
How to Ruin A Business Without Really Trying by MJ Gottlieb
The Pumpkin Plan by Mike Michalowicz
Zero To One by Peter Thiel and Blake Masters
Fail Fast or Win Big by Bernhard Schroeder
The Startup Survival System by Kurt Won
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]]>A summary of things you should know about Fail Fast or Win Big according to Bernhard Schroeder: Introduction In this episode Bernhard Schroeder reveals his insights on his book, FailRead More
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]]>In this episode Bernhard Schroeder reveals his insights on his book, Fail Fast or Win Big, where he reveals how the right kind of risk and embracing fast failure can really pay off.
In his book Schroeder teaches you how to create a quick prototype of your product or service, develop a business model, test it repeatedly with customers, and continue to refine your business model. The goal of the book is to help you determine quickly whether your business idea is worth pursuing, needs new direction, or should be abandoned altogether.
This book is perfect for entrepreneurs who are starting a brand new business and need help figuring out the best way to create a business model, test a product or service, and pinpoint any failure.
I think there are some great books and content out there on entrepreneurship. I am an entrepreneur who has built a billion dollar company and helped build multiple others and so I have a lot of context and experience. I wanted to give the reader a book that was full of rich content on how you can actually test something quickly and that’s the idea behind Fail Fast or Win Big. I’ve taken some of the best principles that have come out in the last five years and I put them all together in this book.
I designed the book to be read jumping in and jumping out but if you wanted to read the whole thing you could.
The main concept would be that you really weren’t born to do anything and you should do what you want. I wasn’t born to be an entrepreneur, I became one.
I am on a college campus and I am teaching college kids in 2008 how to write business plans and at the same time I am looking at what is happening with the recession. I am looking at the idea that it’s not about business plans anymore, it’s about moving faster. It takes too long to write a business plan. I have met people that have spent a year writing a business plan only to see someone else move into the market. So in chapter one I explain why we are at the end of business plans and what you have to do next.
In chapter two I introduce the lean model framework and the four elements. The four elements are customer truth, business model, lean resources, and rapid prototyping.
The title of chapter three says it all, Ideas Are Great but Business Models Rule.
In chapter four I get into another element of the framework which is lean resources and the chapter is titled Lean Resources, Less is More. This chapter explains what the lean resources are that are out there that you can leverage.
Chapter five is about rapid prototyping. I don’t know if there has been a better time in the history of the world for creating a company. In this chapter I explain why rapid prototyping is important and how you can test it with customers so that you can get the right feedback to know whether or not you have a good idea to move forward.
In chapter six I talk about a really critical element of the model which is the customer truth. Since I started my marketing career I believe that if you really want to understand the customer you have to meet them face to face. In this chapter I explain how you can get at customer truth and what are all the ways you can get it very cost effectively.
In chapter seven I talk about why we might not need BC’s in the future. I explain regular crowd funding and I explain the new crowd equity funding that the SCC is now getting ready to release the rules on. This chapter is titled Entrepreneurs have a New Investor, the Crowd and I honestly believe this is an amazing way to fund a small startup or to get a company started without giving up very much at all. I explain exactly how to go about it including how to create a crowd funding or a crowd equity campaign.
In chapter eight I talk about where I see opportunity today. In this chapter I explain what I think the top 10 to 15 opportunities are and how people can go after them.
In chapter nine I provide people with something they don’t have easy access to and that is the first two to three years of the back story of what top entrepreneurs did to make it.
And in chapter ten I sum it up and I talk about the steps people can take if they want to be an entrepreneur.
NOTE: That was just a summary. To get the full deep dive, play the audio clip at 4:57
“As an entrepreneur you are not in the business of writing business plans.” – Bernhard Schroeder
I am a director of Lavin Entrepreneurship Center at San Diego State University. I also teach in the entrepreneurship program and I was a career marketing guy who happened to build a billion dollar company with three other people and launch some amazing companies like Amazon and Yahoo.
After I built my marketing career and a billion dollar company I decided that none of that was motivating anymore and I wanted to somehow figure out a way to help other people have an amazing life. I decided to go back to a college campus and teach and as I was teaching I was asked to Speak at a Ted event. The topic at that event was Why Failing Fast is Great. The next day I got an e-mail from a publisher in New York who said he’d heard about the talk from a friend of his who attended and he wanted to see the power point because he thought it was a book. Before you know it he gave me feedback that this is the kind of thing that can help a lot of people and so I wrote the book.
Spin Selling by Neil Rackham
Buy Fail Fast or Win Big by Bernhard Schroeder on Amazon today
Visit BernieSchroeder.com to learn more about Bernhard and connect with him
Follow Bernhard Schroeder on LinkedIn
Download the full transcript here (coming soon)
Listen on iTunes, Stitcher , and SoundCloud
Related books:
How To Ruin A Business Without Really Trying by MJ Gottlieb
Selfish Scared and Stupid by Kieran Flanagan and Dan Gregory
Scaling Up by Verne Harnish
Relevant advice and tips:
5 Important Things That Every Entrepreneur Needs To Know About Starting a New Business
What did you like and not like about this episode? Fill out this one minute survey here.
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]]>A summary of things you should know about How To Ruin A Business Without Really Trying according to MJ Gottlieb: Introduction In this episode MJ Gottlieb shares his book, HowRead More
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]]>In this episode MJ Gottlieb shares his book, How To Ruin A Business Without Really Trying, where he shares what every entrepreneur should not do when running a business.
In his book Gottlieb gives you 55 of the most painful and destruction mistakes and failures many entrepreneurs make when running a business today. The goal of his book is to help you learn from other entrepreneurs’ mistakes while taking the ego out of the equation allowing you to enjoy the freedom of your own experience.
This book is perfect for aspiring entrepreneurs who are thinking about starting a business and need a stepping stone to help promote faster growth in the beginning.
Most of the books that are out there tell people what to do. I believe that this is really the first book that tells people what not to do. And the reasoning behind that is that I don’t believe entrepreneurs like to be told what to do.
You can absolutely jump from one section to the next and it doesn’t necessarily have to be read from front to back.
I would say doing your due diligence. I think that doing your due diligence is one of the most recurring themes of the book.
The book is separated in to two sections. The first section is 39 case studies starting with the top do nots and never evers. These are the most common and prominent mistakes entrepreneurs make and I do that by highlighting the mistakes that I have made. Every case study has the mistake that I made and then it goes into the right thing to do which is what I know about it now and how I would go about doing things differently. Even though I came from the fashionable background it is applicable for all business whether you are product driven or service driven.
The second part of the book has everything to do with people that are in pursuit of the deal, raising capital, the different types of investors, the whole process of looking for money, the value of resources compared to just money, different problems with technology and different ways that we can take advantage now of the technology that we have. Sections also contain things that you would never learn in a business class such as something like Murphy’s Law. It is full of information that happens in the real world of being an entrepreneur that you really can’t be taught in business class.
“The jack of all trades is a jackass.” – MJ Gottlieb
I have been typically in the offline business for about 20 years having owned and operated five fashion brands since 1991. The last one I owned was up until 2007. I recently wrote a book about all the mistakes I made in hopes that aspiring entrepreneurs can actually learn from those mistakes.
I had just lost my second business and I was writing down all the mistakes that I had made just to get it out of my system. A friend of mine said it was great that I was doing it but asked if I had any idea the value that this information can have for those people that are looking to start a business. He said to call it What Not To Do When Starting A Business and then years later I made it into a book.
How To Win Friends and Influence People by Dale Carnegie
Buy How To Ruin A Business Without Really Trying by MJ Gottlieb on Amazon today
Visit HustleBranding.com to learn more about MJ and his company
Visit HowToRuinABusiness.com to learn more about the book
Follow MJ Gottlieb on Twitter and Facebook
For questions contact MJ by email here
Download the full transcript here (coming soon)
Listen on iTunes, Stitcher , and SoundCloud
Related books: Business in Blue Jeans by Susan Baroncini-Moe | All In Startup by Diana Kander | People Tools For Business by Alan Fox
Relevant advice and tips: 5 Ways Entrepreneurs Can Overcome Business Failure
What did you like and not like about this episode? Fill out this one minute survey here.
The post A Preview of How To Ruin A Business Without Really Trying with MJ Gottlieb appeared first on The Entrepreneurs Library.
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