You woke up with a path breaking business idea, got it all figured out, you had your seed money and you built your own startup business. Why not? Startups have a potential to become big and also give you the possibility of earning you a fortune. If ‘you are a struggling startup, there are definite ways to make it stand up yet again.
So here you are running your startup. And you followed the rules for successful startups, but again here you have a struggling startup that you are trying hard to keep afloat. You scratched your head, dwindled your brains but you still can’t put a finger on it.
Let us take a step by step view into what really went wrong and how you can correct it.
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Entrepreneurs tend to build down from top. They go for a big number and try to scrunch it down using conservative techniques. They calculate the total number of products used in the market, and then assume that they can at least get 1% share of that marker. 1% is not so hard to get right? But the estimated number of that 1% turns out huge, so they get content with the idea of capturing a 1% share of the market.
This could possibly be the biggest mistake made by a struggling startup owner. It helps to be ambitious but overestimating capacity will only land you in a ditch. What would help on the other hand, is starting from bottom up. See how you can market, and based on the method of marketing, estimate the market share. This will be much easier when you know what you are targeting while marketing. And based on this share you can predict the turnover.
You scaled too fast. You estimated your turnover using the top down analysis, and arrived at a big huge number. Now you have come to a conclusion that you need to scale up your business in order to meet the demand of the 1% market. So you start using your precious seed money to acquire resources. This can be avoided by investing only once you have your market and demand in place. It will save you a lot of poor investments and cost and thereby save your struggling startup from going down.
You focused a lot on partnership. A lot of startups use this as their go to for problems. “We have a strong partnership” – this does not save your struggling startup. Sales does. Focus on sales. Focus on ways to increase your turnover.
You focused a lot on pitch. Your idea was big, you dreamed big, you scaled big, all to put up a big pitch. It does not help to make a pitch, but it helps to make a prototype. You want to build something, you want to launch that into the market you want to see how it performs. If you have a working prototype, the pitch would become obsolete. The goal of your company is not to have a great pitch but to have a great product.
You are possessive. You have held onto your company to retain control. It is your, you own it. This prevents more money from coming in. It is beneficial to own a small percentage of a big company than a big percentage of a small company. Hence, let go.
A lot of startups struggle because of traditional and constrained practices. There is no formula for success. Success comes when you are different, when you innovate. It helps to retain and save your struggling startup by thinking out of the box. Giving it a new approach.