We do not have to repeat that startups are notorious for their higher failure rate. 90 percent of startups fail within 2 years of business, while 50 percent cease to exist within first five years. However, this bad repute shouldn’t and hasn’t stopped people from investing in innovative ideas and creative products/solutions.
Economists agree that any market’s long-term growth prospects and maturity are determined by the level of innovation within its ecosystem. Hence, startups and new business investments are vital for economic growth and collective prosperity.
If we look at the global market, over 11000 startups are founded every hour, but how many turn as famous as Dropbox, Uber, or Snapchat? We barely remember the names of a few dozen companies, rest aside startups – and the reason is simple, we remember only those who make history.
What does that mean to you?
Should we discourage the startups trend and ask people to avoid risk-taking? OR there’s another way out as well?
Being part of a startup consulting company, IQVIS; I have had enough exposure to the reasons behind the failure of startups. We met dozens of energetic fellows who had some brilliant ideas, but they miserably failed in the market, forcing us to believe that startups cannot and shouldn’t rely OR over-rely on the ‘power of business idea’. This can’t do anything alone and require a whole lot of factors and add-ons.
Now, you may be thinking about the investments, funding, team, and resources aspects of the business. While they are very important for startup’s existence and success, there is one thing that is more important – and that is product-market fit.
We had a client (who came to us after market-failure) who had a very good idea and abundance of funds – and they had a very good team. However, their product couldn’t lead them to success as there was very little demand – very specific niche.
This episode led me to believe that while idea, funding, innovation, and the team are important – it’s the idea-market fit that makes or breaks. Following a step-by-step guide to validate your startup idea, you can go ahead and avoid lots of obstacles.
How do you determine that?
The best advice for any startup is to test their idea before moving to product development and launch phase. Here is a step-by-step guide on how to validate your startup idea.
Extensive testing will enable you to seek market advice and be proactive to the feedback received. Patience, persistence, and attention to feedback are vital to your success as a startup.
If you believe that you cannot do this idea or product-market testing yourself, get in touch with some friend or consultant for their professional advice. Believe me, if your product is the best fit for the market, shortage of resources or low-marketing budget won’t affect its success as much as the absence of ‘market fit’.
Comments on this article are closed.