How to avoid failure as an early stage entrepreneur

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How to avoid failure as an early stage entrepreneur

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As an entrepreneur, you try to bring together everything that’s needed to make your venture successful—hard work, determination, resources and networks—but you may still find the forces of failure working against you. You’ll thus have to keep fighting against the odds come what may. Here are some things you need to focus on to reduce your chances of startup failure.

 

Make something that people want

 

(Source: 26.org.uk

Most entrepreneurs come up with amazing products and services, but they often forget to find out whether people want them or not. As Y-Combinator cofounder Paul Graham says, “Make something people want.” If startups focus only on attracting investments, they might end up creating products that are not of value to customers, which will affect the sales of their products. So entrepreneurs should first focus on making something that solves customers’ problems—so that they get paying customers and gain financial sustainability for the long run, which is more important than getting investors.

If startups focus only on attracting investments, they might end up creating products that are not of value to customers, which will affect the sales of their products.

 

Start with a Minimal Viable Product

 

(Source: paulkortman.com

A minimum viable product (MVP) is the version of your product or service that you can use to test the market for new products. The MVP usually does not come with all the features your final product with have, but it’s great for testing how customers might view your final product. Starting with an MVP will help you understand what problem your product solves, whether customers are willing to pay for it or not, and what the real cost of production will be. Because developing an MVP requires less time and lower capital investment than for your final product, it will help you achieve two objectives: maximising value to your consumers and minimising your cost. Also, it allows you to make necessary changes and modify your product when and where it’s required.

Starting with an MVP will help you understand what problem your product solves, whether customers are willing to pay for it or not, and what the real cost of production will be. 

 

Remain focused – one thing at a time

 

(Source: hbr.org

Big companies can afford to have an array of products that can help differentiate their brand from others. They can offer a single-window solution to their customers and minimise the inconvenience customers face of having to deal with multiple companies. Also, they keep adding new products because they need to grow and generate more revenue. Many entrepreneurs also want to come up with multiple products and services to solve numerous problems and to generate revenue through multiple streams. But that requires substantial investment and resources that startups don’t have at their disposal. For startups, the best way to put their limited resources to good use is to focus on one thing that they can do better than anyone else. Focusing on one thing at a time should be their mantra for success.

Many entrepreneurs also want to come up with multiple products and services to solve numerous problems and to generate revenue through multiple streams. But that requires substantial investment and resources that startups don’t have at their disposal.

 

Build and leverage your business network

(Sourcce: learningprofessionalnetwork.com

Communicating regularly and creating a strong presence in the entrepreneurial ecosystem will help you and your startup build profitable relations with fellow entrepreneurs, investors, the media and other stakeholders. While networking, always present your company in the way you want other people to see it. This will help you make a mark on your audience and build potential business relationships. Once you are connected to people who can help you with your venture, strengthen the connection over time. Building profitable networks will help you raise funds, get hold of customers, generate referrals, gain media focus, build your brand and find business partners.

Finally, make sure you have a strong support system in place. Find good mentors who can guide you along the way, recruit a board of advisors if needed, and become a member of the industry alliances and business welfare organisations. You can also apply to business incubators and accelerator programmes to make use of the resources they make available to startups, and increase your chances of success.

  *First published in M&S VMAG

 

 

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Guest Monday, 23 May 2022