Everyone wants to be his or her own boss. To totally call the shots on the revenue stream portion of your life and make those shots successful ones. Bull’s-eyes even. And the surest road to economic autonomy since the dot-com surge of the late 90’s has been the startup company – an entrepreneur’s dream that commonly evolves around a single, primary product or service that’s usually interfaced with the Internet and financed by gobs of venture capital. From Apple to Instagram, startups have driven a select few into the fiscal stratosphere and dragged thousands more along for the ride into the upper reaches of the financial hierarchy.
But when the Inspiration Muse blesses you with that can’t-miss, full-on epic concept and you see the way clear to untold riches from the spectacular startup that will result from it, be careful to avoid business failure commonly make.
1. Don’t chase the wrong goal
When you have a really hot new business idea, there is tremendous pressure to jump into the venture capital bacchanal before anything else – like actually concentrating on your original idea and getting it right, first. The wise entrepreneur makes sure that any potential kinks in the product or service are anticipated and examined right at the beginning. S/he sees to it that the all-important business plan, which will support this fabulous new product or service, will run smoothly and efficiently from manufacturing to quality control and all the way down to the custom printed envelopes that accounts receivable will be sending out to those thousands of new customers. Make sure you’ve expended the energy on the goal of a smoothly running, efficient company with a solid business plan before you go running up to the Silicon Valley, begging the venture capitalists for those millions and building your mansion with a super-surround theatre and twin, adjoining bowling lanes, with automatic pin-spotters, in the basement.
2. Ineffective market research
When entrepreneurs start seriously researching the market for their creation, there’s a natural tendency to start by focus-grouping actual product use and likeability. After all, they can’t wait to watch John Q. Public go gaga over their new brainstorm from behind that one-way mirror. But is that the only thing you need to know? That is, how much the typical consumer loves this new product? Probably not.
It’s a good idea to also find out what similar, competing products are out there in the marketplace and ascertain how they’re sales are doing. Good, focused research could lead to possibly partnering with an existing, well-known brand and making your new product a brand extension of that legacy nameplate, like Oreo ice cream to Oreo cookies.
Another marketing dead end to watch out for is the never-ending search for perfection. You are creating an ad campaign with unique selling propositions, theme lines, product placement and point-of-purchase support. But you’re not painting the Mona Lisa. This campaign doesn’t have to win every advertising award in existence; it just has to inform the public about a new product in an engaging way and you don’t need Michelangelo and William Shakespeare to do that. Just lean, hard-hitting copy and clear graphic ideas at the beginning, so consumers have some idea what this new gizmo or service actually is, will be sufficient.
3. You must delegate
An entrepreneur has often gone to hell-and-back getting his new product or service ready for launch. He has sweated blood, crawled through VC minefields and sacrificed his very soul to get this thing to market. So it can be sort of hard telling him that, perhaps, his idea of dropping it off the Empire State Building during a segment on the Today Show might not be the best way to present his brainchild to the public at large. Once a startup hopeful gets his equity crowdfunded and rolling, he needs to kick back and chill a little.
Let the subcontractors, who know the ancillary parts of the business that his new product or service is going to need, come to him and make their pitches; unencumbered by his ‘suggestions’ that may or may not be relevant. You’ve got to delegate authority in the elements of the business in which you don’t have first-hand experience – no matter how brilliant you may be, experience trumps genius when it comes to, say, shelf placement. And, whatever you do, do not make your brother-in-law the fulfillment manager no matter how simple you believe that job is. More startups have probably been ruined by nepotism than any other business practice. Let the professionals do their jobs.