Why Do Startups Fail?

A multitude of potential pitfalls can negatively impact entrepreneurs as they eagerly try to build their fledgling companies…and basically crush their spirit if allowed. In my experiences, there are four reasons that stand out the most:

  • Lack of Research – Research is imperative. It provides insight about what your competitors are doing so can stay several steps ahead and create innovative ways to develop and market your offering. It also provides you with insight about the costs and components of running a successful business in your target industry. Spending time investigating a specific market will show whether there is a demand for your intended offering. Successful research will help shape your vision and strategy. Without it, you risk the future viability of your business.
  • Poor Planning – There are a lot of moving parts that need to come together before your finished product is ready for sale. You have to coordinate delivery timeframes with vendors and partners who are all part of your launch schedule. In addition, you need to plan for bill payment. Figure out what your accounts receivable schedule looks like so you can continue procuring supplies and services you need in a timely manner.
  • Boiling The Ocean – Sometimes it’s hard to know exactly what will be a hit in the market. Hindsight is always 20-20. Sometimes you decide to make six different handbag styles, each available in seven different colors because you don’t know which one will be “the” one until it suddenly appears in an issue of InStyle and you now need to satisfy excessive demand without nearly enough inventory because you spread your resources too thin….ahh, but I digress. Focus groups can help! Talk to your target market and gather feedback. It may push out your delivery timeframes but the insight can help perfect your offering.
  • Nothing Unique – If there is nothing new or different about your product, nobody is going to buy – no matter how much you love it. It’s hard to pull off those rose-colored glasses and embrace the reality staring back at you. Leather handbags? Not otherworldly. Romance novels? Been there, read that. The key is to make your work stand out. Dig deep and find what sets your product apart from the competition and play that up otherwise it’ll get swallowed up into the abyss. Perfect your offering. You care, so figure out a way to make everyone else care. Establish a connection, show how them why they should be invested, convince them why they need your product.
Courtesy of www.digitalbuzzblog.com

Courtesy of www.digitalbuzzblog.com

There’s Nothing Taboo About Failure

Hi, my name is Kristen and I am a handbag junkie.

In fact, I love them SO much that I spent a very large sum of money to design and sell my own. Unfortunately, though I cherished those handbags and saw them having a unique value proposition, my business never did become profitable. I really thought it was on the brink a couple of times but we all know close only counts with horseshoes and hand grenades.

InStyle

I lamented my losses for a long while (and continue to do so when I send my monthly loan payments to the bank). Was I really a failure? I mean, from a financial perspective, it definitely was an epic fail. But if I came away armed with useful knowledge and constructive feedback to apply to my next endeavor, maybe it could be chalked up to a lesson learned, albeit a very expensive one.

I have a close friend who is a co-owner of a man’s skincare line, a very difficult niche market to penetrate. But she believed in her product and drove hard to achieve success with her target. We spoke yesterday and she was completely deflated that her last-ditch efforts to generate revenue yielded no benefit at all. Hundreds of thousands of dollars in the hole and she’s come to the realization that it’s time to say goodbye.

Let me just stop here and tell you, it is HEART WRENCHING to slam the door on your hopes and dreams and downright depressing to see all of your hard work and effort crumble around you. It’s like a bad breakup story. Making the decision to pull the plug is a very humbling experience. Realizing that you couldn’t make it happen? Man, that’s a tough pill to swallow.

failure

Courtesy of www.venturebeat.com

I know this all sounds a little dramatic, but if you’ve ever been in the situation, you know all too well how devastating a loss it is. And for a while, you question and second-guess and lament some more, but it won’t change the overall experience. Sometimes, it’s cathartic to just get it all out there, to share your story with anyone who’ll listen. If you have truly lived and learned, you know where you made mistakes. When they are brought to light, maybe next time around you’ll know which pitfalls to avoid. It’s no longer taboo to hold it all in.  More and more entrepreneurs are coming forward with their own stories.  We’re in good company.

Here’s what I can tell you…don’t be too dejected. You can’t crush true entrepreneurial spirit. Don’t give up on it. If it truly resides within you, you’ll achieve your goals. And all the postmortems and lessons learned you’ve collected over time will make you that much more successful in your future endeavors.  I really believe that…

Embrace and nurture that spirit because once you channel it, you can’t turn it off. It’s what makes you a driver. I LOVE the feeling of coming up with new ideas and strategizing about how to make them come to fruition. The creativity charges me.

So even though things may look dismal now, tomorrow, they’ll look a bit better. And the following day, even better than that, until you finally come away with a lot of clarity and direction about how you can launch the next big thing.

Are You Creating Something Disruptive? If Not, Get Back To The Drawing Board!

I’m a lot of things.  Patient is not one of them.  And it cost a boatload of cash for me to realize that rushing toward the finish line without a solid pair of running shoes is the surest way NOT to win the race.

You see, back when I decided that I was going to design the next “IT” handbag, I needed to jump in with both feet, break both ankles and crash down on my knees before realizing that a bit of education and feedback might get me a hell of a lot farther than throwing an awful lot of borrowed money toward my dream.

Why was I in such a rush?

Nobody had a bullet to my head.  I never stopped to research, didn’t bother to have any informational interviews with success stories.  I NEVER considered getting feedback about the designs.  Why WOULDN’T someone want to buy a Krina handbag?  Best Italian leathers, trendy looks, fabulous colors, celebrity endorsements?????

But while that should have made me stop and think about a longer-term strategy, it only made me want to drive harder.  Get more bags to market, edgier designs, better colors.  Capitalize on the momentum!

After all, InStyle and Katherine Heigl loved their Krina bags, why not the rest of the world?

InStyle

And don’t let Katherine’s super sexy outfit detract from your opinion of the bestselling Calista handbag perched on her luggage cart!

 

KatieHeigl

Unfortunately, I didn’t take advantage of the resources available to me.  I wasted a lot of money, learned a very harsh lesson and realized where I went so utterly WRONG.

Richard Branson recently uttered some great pearls of wisdom for a newbie fashion designer.  Unfortunately, it came a bit too late for Krina but here’s the gist of what I took away from the article in Entrepreneur magazine:

Figure out your passion.  Instead of rushing to make it a reality, take a step back to see if it’s disruptive in any way, shape for form.  Disruption is key to innovation!  A leather handbag is NOT disruptive to the fashion industry.  This is why so many other indie designers crashed and burned alongside Krina.

Testing is also key.  You know what you know but it is limited to YOU.  Getting feedback is essential, as you are building something for a wider audience than just yourself.  If someone gets excited, it may be a winner.

It doesn’t count if it is only you and your partner (my bestie, who is thankfully STILL my bestie after what I put her through!!) who are jumping up and down and popping corks on champagne bottles to celebrate the birth of your creations.

 

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