How can startups fail?
How many ways can a startup idea fail? or how a startup launch fail?
Fundamentally, a failure is defined by two facts:
1. The company runs out of funds and can not pull in new funds;
2. The founder or board decide to shut it down for whatever reason.
How can a company run out of funds then?
1. No income
2. There is sales, but not profitable, and there is no further investment (such as IPO or PE investment);
3. There is sales, but the sales were removed by competitors
How can a company have no income? when the value proposition hypothesis was not accepted.
How can a company have sale but not profitable?
1. when the price space is controlled by competitors including dirty tactic competitors.
2. when the product fails to have quality control.
How can a product not have quality? when there is no good great talent working on the project.
How can a company not have talents? talents don't want to join for salary considerations, or the company's mission is not exciting
What are the top reasons the team will shut down?
1. Founders dispute, human error from day one.
2. The successful establishment or running of the company is no longer interesting.
How can a startup have no sale? how can a wonderful product not accepted?
1. There are interesting features, but the channel rejected your product because the channel will have to be destroyed to take you. Basically, because no one can make a living off you.
2. The product is worth the price, but not worth the value. Say something costs 100 to make and you sell at 101. But in reality you should sell at 10 and sell 1000 units.
Why VCs don't fund you? there is no reason, there is no guarantee they will take their money back in multiples in 2 years. (Say 3 times return in 1.5 years).
Why they don't see the promise?
1. There is no sales validation yet
2. There is no story to tell other investors. The product is exciting but the story is not exciting.
3. You and your team are not high quality. You can not second time entrepreneurs. You are just technical talents, not startup veterans.
Question asked by
May 24, 2020, 12:01:38 PM
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The process for a process to gain access to market
A product must gain access to a market and then bought by a customer who is comparison shopping in a safe place. The market validate the quality and safety of the product.
Steps to turn an idea into a product innovation
What are the steps to turn an idea into an innovation? there are at least the following steps. The idea must be turned into a product, and the product must enter the market. In the market, the target audience will examine the artifact - if they buy, then the product becomes a merchandise.
Startup failures - why they fail?
A first time entrepreneur always under estimate the difficulties. Each voyage is a ship with 2000 holes - each hole is only visible when the boat is in water.
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Startup Lingos To The Point
How to turn an interest into a money maker. How to attract people, how to stimulate people to pay, how to make profit, how to make relations, how to keep relations.
How much do I have to give my audience so they can pay me something in return? What do they value? what problem do they search for answers on your own? I want to solve that problem.
Brand means name recognition. A lot of people knows what your company does and what you stand for. Brand is result of long campaign of consistent value provision and media cultivation. Brand helps a company reduce marketing cost.
Whether there are buyer willing to pay or not. For that to happen you must provide extreme value. The entire startup process would be based on guess before the validation. Validation happens in a market, not on the street.
Value is what you give customers beyond the price you charge. Value is effective solution to a problem. The price your customer pays reflects whether the problem is big for them and whether your solution is uniquely effective. Value stems from quality and detailed work.
Marketing means bring your product to the market and bring your message to your customer. Marketing is not salesmanship. Marketing is to penetrate the world of commerce through many barriers and existing networks.
Minimally viable business, or MVC, minimally viable company. A company that scrapes by, full of guess and hope and no traction and sales. When you give your customers things for free they all take it. But they never pay and you can never rent a table at the market.
Minimal viable product. A full artifact of a real product. Something that works ALL THE TIME. You can demonstrate the real effect on real people - not to sell hope. The MVP may not have certain non-essential bells and whistles, but it needs to have appeal value.
Customer is king
A business lives at the mercy of its customers. You provide your customers 10 dollars worth of value and they pay you 1 dollar, not knowing that your company only costs 99 cents to provide the item. The value is not the item - the value is what is attached to the item.
Company culture is based on a company making money. Once your workers are paid, they need to have a mission and aspiration so they are not bored everyday and make trouble in the work place.
A company valuation is cash investment divided by the percentage. As long as your story is good, the valuation will keep coming, and the investors will keeping falling into the line.
Return on investment
Investors are either behind family fortune (never work with them) or for rich clients as investment vehicle. Both need returns 2-3 times better than stock market darlings.
Having found what people want, not just what people may need. Your offering and their acceptance is sure, no longer a guess. You can provide it for profit, and you can indeed making living on it. Traction is sometimes called validation. You are no longer a theater. You have touched nature, and found cash vein.