Businesses and startups at present should be more alert and cautious than they were ten years back. This is because of the business models that are being followed now. For example, the on-demand business model requires very little capital and this has made many to launch startups using this model. But, more money is spent in the day-to-day operation of such business startups and only a few end up successful.
In such scenarios, it would be better to follow some guaranteed tips to avoid a disaster. Here I have mentioned 10 tips which are gathered after meeting several successful startup founders, surveying businesses across the globe, and analyzing failed on-demand startups. Some of you may already be following the points given here, for them, I suggest to revisit and revise the strategies.
Take care of the unit economics
The probability of success for a startup is just 10%, which means 9 out of 10 startups continue to fail. One of the prominent reasons for failure is because of not so solid unit economics. Long term viability of the startup depends on the unit economics of the product or service. Uber or Ola can afford to not worry about the unit economics because of the funding they get.
Medium and Small business startups must design strong unit economics to make their business resilient, although it hurts them for a short time. That said, it is okay to compromise on the unit economics of your product for a brief period to capture the market share. Also, don’t even think of expanding your business with bad unit economics, you are not going to make a profit anyway.
Prioritize value more than the price
You have a big giant in the business as your competitor. They have a product/service and a price for it. What if I say that you can easily beat them with something that costs less than theirs. This is easy, isn’t it? But, it is a very bad idea to compete with someone on price. To do it you have to deviate from your normal operation, go the extra mile to raise funding, sustain bad unit economics, and whatnot? you will fail quickly.
So, always bet on the value of your product. No matter how slow and hard you go forward. Have the right team with great talent to develop a premium product and charge the optimum price. Automatically customers will come to you. Remember that the right customers will choose the right product irrespective of price.
See whether the market exists
You would definitely have done thorough market research before starting the business but still, it is not necessary that the need should be consistent all the time. What to do next? Simple, again do market research and ascertain your place.
Doing this will help you to reshape the product or diversify the product range so that you are relevant all the time. If your existing product is going well then, focus on improving it.
Overlooking the market requirement will hurt you at the time when your competitor provides a product/service with full market understanding.
Look out for new markets
By the time when everyone is focussing on a single market, you cleverly expand your market by simply altering your existing product or service to suit particular markets. This is one of the ways to be competitive.
New markets can be identified by finding potential customers. By the time when your competitor enters the new market, you are already a stronghold there. Always be the first one to make a move. Innovating your existing product can also help you to exploit new opportunities and enter new markets.
Be cautious of your competitors
If your competitor is a notch above you and you are trying to replicate their moves, I don’t think it will work positively all the time. This is because they may do some moves to trick others. You must not fall in their trap. Sometimes, they even exaggerate in their press release. So, be wary of your competitors before following any of their steps.
Hire smart people
Your employees make up your business. You as a single person cannot take your business forward but good teams can do. So, get on-board smart people by testing various relevant skills required for your business.
Having great employees is always better than having more employees. Hiring directly by you is even better.
Follow lean method
Minimizing the waste and maximizing the effectiveness is the core of lean. To do this you have to be in constant connection with the buyers. Interact with them to identify the redundant part in the service or the product and also the areas you have to improve. Following lean is one of the ways of improving the value of the product.
Some features of the service may have been designed after a long process by investing more effort and still it will be considered unnecessary by the users. Here, you should remove that feature at any cost no matter what.
Always think of the future and long term sustainability. You may have been performing not very well at present but that should not deter you to think of the future. Planning your next step also includes anticipating all the scenarios. Sometimes you may get surprises when planning for the future.
At the same time, there will be some unpleasant scenarios that can be done away with.
With many data analytics tools at your disposal, it is unwise to not use them. The analytics tools are used to measure and create a report of the various performance metrics like sales per day, customer demographics, marketing expenses, and many more. These reports can be effectively used to improve the startup.
Customer retention using automation
Keeping a constant touch with the customers is the key to customer retention and in today’s scenario, it is next to impossible to do that manually. So, it is inevitable to use automation like chatbots to engage with the customers. Apart from chatbots, automated mass push notification schedules voice calls, and emails are some innovative ways to retain the customer and establish a long term commitment.
That is it for now. Religiously following the mentioned steps will surely bring you some amount of growth in your business and make you competitive. That said, you should not be satisfied with what is said above and must explore new avenues to improve and always aim to be a notch higher than the competitors.
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