My view: many tech startups are not very customer centric in their thinking in the sense of “what customer pain do we address”? I observe that very often, technology is being developed because they can, not because the market is waiting for it. Great example in my view is Google Glasses for the consumer market… many other examples exist
Good point, some times the market/customer need time to mature and be ready to accept it
Well, based on my experiences with tech startups, I would sum up the reasons with lack of target group knowledge and management skills. I’ve observed in many cases that tech startups have an idea of a service or a feature, but they don’t have a deeper insight about the tasks, needs and pains o their potential target group - expecially if it turns into financial issues - so what are users willed to pay for and how much?
The other aspect are missing management skills. So what needs to be done, when, how, by whom (Projekt Plan/resonable Back Log). The Back Log brings me to the next missing link: Most startups have a tech idea and they know what needs to be done to make it technically happen, but they don’t have an idea about the quality framework, i.e. Design framework, priorities from user perspective, definition of a larger context and overarching lighthouse objectives, which guides the team to make own day2day decisions.
This is the situation. What can be done to help them to more successful?
_Building a clear Business strategy (Market-/Targetgroup analysis and Value proposition development, eventually marketing/business plan, which contains the 4P-perspectives - price, place, product and PR)
_Strategic Organisational development - not just putting people together and let them work without a sound plan and purpose
Well said, it seems applying good judgement and project management principles would help - as most in the tech startup side are focused more on technology
MIT research showed that one main factor is the age of owners. They analyzed dozens of startups and then it came that perfect age for making startup is between 40-55 - if we count those ones which became well known. And of course, there is a science between that. A lifetime experience, the network of connections, ability to learn, ability to research, ability to understand the market.
From my experience, there are two common mistakes that I saw many times. First, is the lack of market research made professional. I saw many times that somebody does not spend money to dive deep into market analysis and proceed with startup. Second, the heaviest is ego, people tend to go blind with initial idea, and do not want to challenge it. That’s why a lot incubation processes are about making space for learning and cooperation learning, but still, people are not open to that.
I would agree with you in the lack of self awareness of some founders. They have a brilliant or at least really potential idea, but they struggle to accept inputs/feedbacks, etc.. And when the operation starts to grow, they lose the sight of what needs to be changed in their leadership style and employees don’t follow exactly founder’s expectations,
Agree with speakers above. It is described in many documents or articles. Try to put your idea on Lean Canvas. If you had a problem to do it, then this is the first signal. If you had a discussion over this with disappointing results, then this is a next signal as well.
Lack of Market Validation
Lack of Market Validation
Lack of Market Validation
Lack of Market Validation
Lack of Market Validation
yes ! and skills to make validation right.
1. Either you were unable to convince the market of the need because you were too early or your marketing was unconvincing, or there was no real need in the first place
2. Insufficient funding
3. The wrong team, at the wrong time, in the wrong place
4. Your product is deficient in quality, UI, or in design appeal (is ugly)
5. You priced it wrong - either too high or even too low
According to my experience, 90% of all startup failures can be split between two major reasons:
1) Timing. Timing. And Timing. Bad process management, silo-mentality and poor inter-team coordination all are a surefire way for a “failure to launch”. In some cases, even a good product will become a “flop” if launched too late or too early.
2) Lack of consumer demand, usually being the consequence of a poor market validation and in many cases, also resulting in a wrong pricing policy.
The question assumes tech startups fail for different reasons or at a higher rate than other startups. Having started and worked in both, I see no evidence of that.
Ultimately a business needs to sell a product or service at a profit to survive. Success factors such as knowing your market, being adequately funded, and competent management are essential to any new business.
Tech startups can fail because they bring products to market at the wrong time or unstable prices, but the same can be said of toys or fashion. Therefore the better question is, why do startups fail. While the order and wording may be different, the answer is almost always some combination of:
1. Lack of understanding of what the customer wants
2. Lack of funding
3. Lack of management skill
4. Lack of luck, i.e., starting a business just before a pandemic
5. Lack of perseverance
Technological startups are unique in their ability to create entirely new realities by bringing capabilities to the market that never existed before. However, these unicorn events make for much better stories than business plans. The best strategy for any entrepreneur is to surround themselves with great talent, gain access to far more money than they could ever imagine using and be prepared to pivot when all their assumptions turn out to be wrong. Most successful startups look very little like what the entrepreneur imaged when they first started.
This is an area equally critical to well established companies, and not just a challenge for Start-ups, I propose you focus on following capabilities:
- Define paradigm for New product/service-model Development
- Align business strategy and IT capabilities.
- Firm scope and expectation management.
- Combine Agile and (time boxed) Iterative processes.
- Link New Product/Services to added value for customers.
Market Sizing - Market segmentation / “Class or Mass”? - “What are the needs & wants?” - “Any WOWs?”- “Product or Feature?”-“PoC with PoV?”-“Loyals Impression”-“Employee Impression”-“Competitor Edge or Your Edge?”-“Success Criteria and Scalability Simulation”-“Another Rollout?”-“Measure-Validate-Correct-Test-Simulate”-“Feels Good?”- Oops!! - DIscard or Replace?- Umm… that was close? or Wow that flew well…..Lets go for it!!!
Launch it….lunch it…dinner it…eat ...sleep..update…Repeat…..
That’s it or really is that it?......
I ponder upon what I wonder it would be…...
Tech companies design very cool products that most of the time are not solving any customer problem or real need. There is a gap there.
I’m coming from health tech and main issues here are related to regulatory. Most of the time Digital Health Tools are designed without considering the “regulatory” needs during the inception phase. The redesign to make the product “regulable” ends in many cases with the initial funding of the company, so the idea dies prior they are able to commercialize.
Many start-ups are one-dimensional and lack the ability to create an integral approach covering all relevant domains. Basic features are backlogged as these are not considered to be part of the MVP. Secondly many do not have a growth strategy and keep on relying on the first employees which usually do not fit in the next phases of a company. Many times founders are considering themselves as the experts and are limited open for constructive feedback.
Another aspect for a succesfull start-up is just plain luck. Being there at the right moment.
I think unrealistic expectations to win a pilot customer, lack of experience to scale for more customers, IT being outsourced to expensive developers not part of the start up, not enough ‘hunters’ in the team and finally lack of entrepreneurial passion in the start up team
1. Embrace Failure for Learning:
Encourage a culture that sees failure as a valuable learning opportunity, fostering resilience and creativity.
2. Diverse Team Composition:
Form multidisciplinary teams to bring diverse perspectives, skills, and backgrounds, enhancing problem-solving capabilities.
3. User-Centric Rapid Prototyping:
Prioritize user feedback through quick prototyping and iterative development, keeping users at the core of the process.
4. Dynamic Business Models:
Adopt flexible business models that can adapt to changing market conditions, ensuring ongoing relevance.
5. Ethical Innovation Focus:
Proactively address ethical considerations in product development to build trust and avoid potential backlash.
Incorporating these radical strategies requires a departure from conventional thinking, but it can create a more resilient and innovative startup ecosystem, ultimately contributing to a reduction in project failure rates.
Better planning in the initial stage. Many don’t have clear in mind where they want to go and what they want to achieve. Is “To be a Unicorn” the goal? You must have a strategy, a serious commitment, or better discipline, nonetheless tight control and continuous adjustment of your burning rate.
I would like to add to this thread that overall Business Model need to be clear and workable, tech startup are not just about fancy technology ideas, but as mentioned before, the idea need to be tested, there is a need to define a customer perspective, target market, a reliable financial and resourcing plan, .. it has been mentioned as well, culture, capabilities, managerial and technical, ... scalability, and readiness for growth and many other reasons already mentioned by my colleagues.
Haven't found a solution?
This will mark this comment as best reply and close your question.
Are you sure?
This will close your question without a Best reply.
Are you sure?
This will report this content as inappropiate to the moderators.
Are you sure?