Will your new business fail?
Recently, a study by Harvard Business School’s Shikar Ghosh shows that 75 percent of ALL new businesses fail. In addition, a great number of new products and services in the market perform below average. The trend seems to discourage majority people who are seeking to turn ideas into new business.
I don’t blame anyone who chooses to not become an entrepreneur. After all, who wants to trade the security of a corporate job for the risk of entrepreneurship? Many people are more comfortable working for guaranteed paycheck; unfortunately, entrepreneurship does not offer any such guarantee.
What if startup founders knew what to do to raise their odds of success from day one of starting their business? What if you can take one idea away from this post; implement it, and eliminate your odds of failure?
The No.1 reason why businesses and new products fail
New products fail not because business owners do not build exactly what they have it in mind. The Number One reason why products (and businesses) fail is because founders waste too much time and money, creating products and services nobody cares about.
For more than four decades, entrepreneurs have been deceived to believe that the only way to start a business or build a new product was to:
- Find an Idea
- Write up a business plan
- Pitch plan to investor and obtain finance
- Build a product or service
- Sell in the market.
The only time they realize that nobody cares about what they built was after trying so hard to sell without success. By this time, they had wasted so much money in product development, company creation, and strategy execution.
The Fallacy about Business Plan
For more than forty years, startup founders were wrongly advised to write business plans as prerequisite for how to start a business. Today, that advice is proven wrong. In reality, business plans are irrelevant for starting a new business. The goal of business plan is to execute strategy, and only large companies have what it takes to invest in it. Startup founders don’t execute strategy because they have no company, no validated product, and no market. The goal of a startup founder is to search for product-market fit, and until he or she finds one, they have not business and cannot execute strategy.
Understanding “customer wants” is key
When it comes to product development, many startups build what they think customers want. They do so without talking to customers to learn about their pains, and the solutions they want. And in almost every time, customers reject what they build.
In my new bestselling book, THE ENTREPRENEUR, I provided a step-by-step approach, by which you can start a successful business or develop a product or service customers can buy willingly. There’s not so pleasing as building a sustainable business around ones product or service idea. This book will show you how to do just that.
The Entrepreneur contains lots useful concepts and simple innovative tools, which I call Lean Culture. Lean Culture provides an alternative approach to starting a new business. It consists of business model canvas, customer discovery and validation models, Minimum Viable Products (MVP), specific financing options to startups, a guide on creation of company, and expert’s tips for startup website development. The goal of The Entrepreneur is for startup founders and product developers to achieve their goals of creating products and services that customers will buy and pay for.
In order to eliminate the high risk of startup failure, you need to create products and services that customers want. The process begins with testing your idea to ensure that it aligns with the pain or need your customers have. It also helps to gauge the size of your market upfront. An important of aspect of customer discovery is the opportunity of talking to a number of your customer segments early enough, learn what they want, and leverage their feedback to build exactly what they want. You will find every step you need to implement this process in The Entrepreneur.