5 Startup Myths That Can and Do Kill Companies
Starting a company is one of the most exciting challenges you can embark upon. You get to see your passion become a reality, and as a tech startup, watch your product or service make genuine, positive changes in your clients' lives or businesses. However, there are still many startup myths surrounding new businesses, most of which are based on misconceptions about what drives success and what causes failure.
Current statistics indicate that around 11 out of 12 startups fail, which is around 91%. While that’s an alarming figure, it shouldn’t deter you from aiming for success. After all, the other way of looking at it is that at least 9% of new businesses go on to achieve real, long-lasting success. One way to lay the foundation for that is to learn and dismiss the following five startup myths that can (and do) cause businesses to fail.
Myth #1: An Idea is All You Need
If only business was that simple! Ideas are great, but they need hard work, a great business model, and a team of people driving them forward. Investors also want to see that your idea already has results. In other words, what research have you done? What pain points have you solved for customers? Be ready with the answers and the data to back those answers up.
Myth #2: Every Scrap of Revenue is Vital
This is what we call Revenue FOMO: the fear of missing out on any revenue, regardless of where it comes from. Scrabbling to get every cent from every potential customer will almost certainly lead to you failing to draw in the clients that will stay with you throughout your business journey. Targeted lead generation is the key to clients that will increase ROI and your brand reputation.
Myth #3: Growth is More Important than Profit
If your company is not making a profit, eventually, it will die. That’s just a hard fact. Growth is also vital, but there is a recent trend of “grow at all costs,” which often fails to take into account what happens when the initial traction wears off, and the company still has to drive a profit somehow. Focusing on both growth and a profitable business model is vital to attract investors and ensure that your business survives past the first wave of clients excited about a new product or service.
Myth #4: It’s Easy to Build a Business and Sell It
If you create your business with the sole goal of pursuing an acquisition, that business will inevitably fail. It’s not actually feasible to pursue acquisition, because you don’t know what larger corporations are looking for and what other market conditions need to line up to make your business seem like a good purchase.
Ultimately, if your business isn’t succeeding in its own right, it’s never going to be seen as a profitable acquisition. Focus on running your business, and the rest will come in time.
Myth #5. If You Create it, Clients Will Come
To paraphrase Field of Dreams, “If you build it, they will come…” is one of the most pervasive startup myths and absolutely not true. In other words, you need more than a great product or service – although that’s absolutely vital! You need a clear and cohesive brand plus a marketing executive that can guide your marketing strategy to put your tech offering in front of the right clients and potential investors. Without this, you may as well put your app or SaaS in a box and lock it away because there’s no way anyone who would value your product will ever get to know about it.
Final Word
Of course, it’s not all doom and gloom! By highlighting these malicious myths, we hope to help your tech startup survive and thrive in a competitive market. If you want more help and support growing your brand and your business, book a 15-minute introductory call and find out how our freelancers can hone your marketing strategy for a better chance of continuous, long-term success.
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