How To Identify a Promising Startup from a Flaky One?
Aug 30, 2019
The startup culture is one trend that took flight over time and tempted many young entrepreneurs to bring out brilliant ideas hiding inside closed cabinets.
Usually, every startup doesn’t stand a gleaming chance at succeeding in the marketplace. It's hard to remain oblivious to the fact that startups have to face many hiccups before standing tall at one position. While you may believe you can strike gold with your big idea, the reality is that three out of four startups go out of business. Sometimes, even a few big ideas fail to lay the golden eggs.
Neil Patel, an entrepreneur, and online marketing expert, in an article in Entrepreneur India, mentions, “Startups fail at the rate of 90 percent. That’s kind of scary if you ask me.” It indeed is, though, startups that manage to keep the wheels of innovation spinning often skip the turbulence and avoid the vulnerability to failure.
There are other tell-tale signs which imply if your startup is destined to prosper or tumbledown. Let’s have a look at a few such indicators.
Signs of a Promising Startup
Take Measurable Strides
They set a milestone and devise strategic one or five-year agenda to achieve their objectives. Instead of panicking and developing approaches limited to survival, they actively plan to expand the business in national and global markets.
Learn From Failures
They identify their shortcomings, which result in failures and turn these lessons into their advantage. Success is scarce in business but not difficult to achieve. If a startup never fails to experiment and learn valuable lessons from every significant setback, then you can be optimistic about their successful growth.
Their Solution Is Aligned With The Customer Needs
If the business brings out products not catering to their target audience, then the entire startup idea is pointless. A promising startup discovers and builds products revolving around their customer’s interests by carrying out market research.
Signs of a Flaky Startup
Flaky Business Model
What is the use of a brilliant idea if your business model or the blueprint does not echo with the concept? If you skip the main parts where there will be - market research, competitive analysis, and developing a monetization strategy, you may as well be sure about the failure.
Not Eager To Learn
All your business ideas will sound like a broken record if you think you know it all beforehand and decide not to learn anything from the successful entrepreneurs who went through the same hurdles as you.
Lack of Cash Flow
At some point, if you haven't secured funding and don't have a solid plan in place to get a revenue stream flowing, you're going to run out of cash. Even the most frugal of ramen-eating, Grandpa's garage-based startups need cash to keep the lights on.
There is more than one reason why three out of four startups fail. There are millions of people out there who are sick of their boss's rants and decaf coffee and want to start 'something' of their own. But, making that something work in the current world needs well-thought-of blueprint and plan of action, so that it does not land on its face. This blog is not to discourage or stop someone from pursuing their brain-child, but emphasizing on the real facts about why startups fail and how to identify the red flags and work towards making it green.