5 Biggest Mistakes Startups Make and How to Fix Them
Being an entrepreneur takes a lot of guts, grit and business savvy. The “mental game” can be hard, and the odds are stacked against them. According to the U.S. Bureau of Labor Statistics, nearly half of all startups fail after five years. That is a daunting statistic, and my goal is to help change these odds, one entrepreneur at a time.
I’ve worked closely with many startups and seen them make the same mistakes over and over. By preventing some critical business errors, startups have a greater chance of making the change they wish to see in the world.
Entrepreneurs can go farther by not stepping in theses potholes:
Big Mistake # 1: All product and no brand. Tech companies especially can get blinded by what their app or product does, making them completely forget about the brand. They get stuck in the quicksand of its features.
The functionality of the product is important, but without a solid brand strategy, you can’t clearly define the problem you are solving and who will use your product. This is painfully felt when you are ready to market.
Without a brand strategy, many companies are chasing customers rather than attracting customers.
Without a brand design, you are not instantly recognizable (which means you are instantly forgettable), and there is no way for customers to understand who you are and how you relate to their lives.
Larry Alton, of Entrepreneur.com explains, “Without that core identity, your company is virtually indistinguishable from your competitors, and even with a solid business model, it’s unlikely that your customer acquisition and retention programs will succeed.”
Big Mistake Fix #1: Evolve your brand and product in tandem. When the brand strategy is thoughtful and clear, it naturally leads to smart brand design, which leads to memorable naming for the brand and products, leading to breakthrough marketing.
These “seeds” of a strong brand make it successful. In my mini-ebook, 9 Design Elements Your Brand Absolutely, Positively Needs, I explain how to create these seeds. As you go through this book, don’t be afraid to be bold.
Yes, you may create brand concepts that “suck” at first. Don’t be discouraged.
It will get better. Express your brand authenticity. Stand out and keep iterating.
Big Mistake #2: Be the perfect brand. Building a solid brand takes time. Famous brands took years, if not decades of iteration to become the icons we know today.
In this article, Business2Community reviews some iconic brands and how they have changed over time to adapt to the needs of their customers.
Not one brand I know started out perfectly.
It’s got to evolve.
Big Mistake Fix #2: Take the phrase “building a brand” literally. The keyword is “build.” Don’t waste time thinking it's going to be perfect right out of the gate. Going for the unattainable will delay your progress.
Instead, have your partners agree on a cohesive brand idea that's good enough; a minimum viable brand. The software industry creates excellent minimally viable products (MVPs), and you can take a cue from them. They get the MVP out in the world and see how consumers respond. They observe what customers like and don't like, then alter the product as they go along.
Startups have to do this with their brands. Develop a MVB (minimum viable brand). Iterate and evolve it over time.
You can't hesitate, wait, or be frozen by the fact that you don't have the perfect brand right out of the gate.
Big Mistake #3: Keeping your head down. Entrepreneurs running startups are notorious for tunnel vision, which can be an asset. However, when it comes to knowing your competitors, you have to pay close attention.
“While obsessing over the competition is not healthy, ignoring them was also a recipe for failure in 19% of the startup failures,” reports CBInsights.com. You must know your market and all the players.
You would not believe how many brands and companies have a discovery call with me and can't name their top three competitors. If you don’t know your competitors, you can’t possibly know how to compete with them or where there is an opportunity in the market. You need to know how people will perceive your brand in relation to the others in your arena.
Big Mistake Fix #3: Marketplace audit. You have to be aware of your competitors in order to be different and better. I recorded an information-packed video on how to differentiate your brand and created a downloadable audit worksheet to help you gather all the important information you need.
In addition to the competitive audit, make sure your brand has a role model.
Find three or four aspirational brands; brands that you want your company to be like when it grows up. They can be in or out of your category, it doesn’t matter. The key is that they exemplify the type of behavior, look, and success that you want to emulate.
Aspirational brands will help you define where you are going, which will help you drive your brand to success.
Big Mistake #4: Chasing the wrong channels. One of the best and worst things about marketing is the number of channels available to market your brand.
It can be easy to get hung up on a channel without thoughtfully assessing them all and choosing the best one for your brand.
There will probably be more than one channel that is right for your brand. How do you pick?
Big Mistake Fix #4: Your Target Audience Has The Answer. Two simple questions will lead you to the most profitable channel for your brand:
Who are your customers?
Where is the best place to get their attention?
This is why the brand strategy is so important. Once you define your customer avatar (Mistake Fix #1) you can determine where they “hang out” (e.g., social media, sporting events, trade shows, charity balls, etc.). This will inform you of where you need to show up - in other words, your channel.
Here’s how to get started in marketing channels:
Spend a minimum amount of money on several different channels, and check your analytics over time. See where you're getting the most engagement and the most traffic, and grow your presence in those. Once you find one or two channels that work, leverage them.
Showing up really well in just a couple channels is always better than showing up half-assed in a dozen of them.
You don't want to be everywhere. It takes too much time and money. Start out small and build from there. Focus on what works for you.
Here is a short article from Hubspot that will help you start thinking about the channels that may work for your brand. You can also look at your competition. Be informed by what they are doing, but don’t copy them.
Big Mistake #5: “Et Voila” Thinking. We all love the stories of VC-funded startups with a hapless founder who sketches out some brilliantly simple app, and then months later cashes out for millions of dollars.
The truth is that this rarely happens.
Building a brand takes a lot of time, courage, and tenacity. There is no recipe to follow. You don’t add a little of this, a dash of that, pop it in the oven, “et voila! Success!“
It takes time to see the return on your investment. It doesn't happen overnight.
Big Mistake #5 Fix: Don’t let ideas of overnight success rent space in your head. Instead, focus on evolving. Understand that it takes sweat equity. Remind yourself that success is a long game. Ultimately, there are two things a startup must do to be successful:
1) Start
2) Don’t stop
Your entrepreneurial success depends on so many factors, both internal and external. My advice and encouragement to most entrepreneurs is to be bold, start simple, iterate over time and learn from the mistakes of others. Let’s make our world just a little bit better. One startup at a time.
