A situation often happens when the idea for the future business is excellent, and the target audience exists. It would seem, take it and do it!
29 november 2019
A situation often happens when the idea for the future business is excellent, and the target audience exists. It would seem, take it and do it! But something goes wrong at the last moment, and the start-up idea flies into the abyss. Mistakes in the development or implementation of financial innovation startups lead to business failure. Let’s see what influences this?
Analysts claim that the main reasons for the failure of an idea depend on the leader:
insufficient funding for project implementation;
lack of experience;
lack of interest in the implementation of the idea.
The last point affects the development of a startup more seriously than others. After all, if the manager does not want to continue to implement and develop his business, then this is a deliberately bad approach to entrepreneurship. In addition, the lack of professional training of the team leads to the rapid burnout of all participants. Therefore, specialists such as analysts, economists, as well as people with experience in running their own business are very much appreciated in this case. Thus, it is not surprising that the popularity of the business analyst job in Moscow in recent years is due not only to the development of the IT sector, but also to the growing interest of citizens in startups. So, let’s get straight to the common mistakes that are made when launching a startup in this industry.
Rarely does a project get the funding it needs at the idea level. Then investors are not yet sure about the prospects of the idea, especially if the startup is launched by a newcomer. Fixed assets at the initial stage are mainly their own savings.
It is necessary to attract serious companies to invest in business at the stage when the company has become famous. Venture capital funds also require proof that a startup has the right to be successful. This can be done after concluding several transactions and acquiring several regular customers.
In addition, many investors claim that the startup founder lacks sufficient acumen to run a business when an investment of tens of millions is required. They recommend that the founder remain in the top management position and hire someone who understands more about investment flows.
Not enough marketers
A common mistake for newbies is when they pay more attention to the technical aspect of the development of a startup. But in this case, they do not think about potential buyers, feedback and purchase of a product or service.
An erroneous step: starting work without preliminary market analysis, identifying the target audience. In this case, consumers and entrepreneurs do not have the opportunity to communicate with each other. In this way, the buyer does not know about a new product on the market. It turns out that this product remains unclaimed due to the lack of a correct marketing approach.
The solution to the problem will be to study the consumer, future competitors and partners. To do this, the team has specialists who can solve these problems.
Who to focus on?
If the founder of a startup is persistently striving to develop it in the future, then focusing on the domestic market is the wrong move. It is unreasonable to hope only that a business idea will be bought by a compatriot company.
Experts in this industry say that when thinking about the serious development of an idea, you need to turn to Western colleagues for investments. This increases the chance of earning income several times. On the other hand, though, demand generates supply.
In this case, a characteristic feature of a profitable project is the ability to be realized in the foreign market and satisfy the desires of its fellow citizens. That is, the development and partial sale takes place on its territory, and the main part is directed to European countries.
Profit or Growth?
Alexander Galitsky, member of the GenerationS Board of Trustees, says: “Growth is more important than profit.” He suggests thinking about whether it is necessary to continue trying to develop a startup that is not growing? Is it worth wasting time on a job that won’t be profitable in a couple of years?
The market is constantly evolving, innovative ideas appear every year that change the vectors of development. Then a business that does not grow takes the same position for a long time, basically unpromising. With a new idea on the market, it will become an outdated version that will not interest anyone.
Galitsky says growth is more important than quick and fleeting profits. Only constant development brings the company to a high level and achieves a stable income.
Conversations with an investor
It becomes difficult for newcomers to the business game if they do not have communication skills. To attract the attention of an investor, he must be interested in advance. For this, the founder of a startup must correctly formulate his ideas and voice them.
Such phrases that attract instantly are called a value proposition. It lasts no more than seven seconds, but manages to express the whole essence of the idea. Only a few seconds are given, because this is the average duration of the listener’s focused attention. Then interest begins to dissipate, the recipient listens with half an ear.
To make the value proposition sound convincing, use specific numbers, percentages to correlate and compare some indicators.
The Commandments of a Successful Startup:
create a friendly, qualified team;
not getting used to big money at first – they quickly dissolve;
express your thoughts in seven seconds.
Creativity and originality will help you create a profitable project.