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Monday, 22 December 2014

3 Reasons your Start Up will fail in 2015...

...or at least it will if you make these mistakes...

Speaking with Angel Investors is always interesting and entertaining...
They remind me of Gamblers - they always tell you about their wins, but gloss over the losses; telling me they are in the "investment" or "development" phase...
They have that hopeful optimism of explorers and prospectors; the next big win is just around the next ridge, gold will be found under the next rock..
When they calm down and reflect on their investments, there is a pattern that emerges about why Start Ups fail - so here are the lessons they have learned so painfully...

The Number One reason a start up fails is...

The person in charge is an idiot...
So if you are an idiot - don't start a business - just a tip. Sounds really harsh, but look around you at the people who get fired from their jobs for being incompetent, or made redundant for being ineffective, and overnight become "Entrepreneurs.."

Entrepreneur translates to "Unemployable" so remember that it's not because they are any good that they are starting their business - it's simply that they don't have any other option..
Would you invest your money in an idea created by an unemployable idiot..?
Some Investors do - it's called Greed, they of course call it strategic planning, but as whiskey is sure to improve the looks of the person sat at the bar with you, greed makes a junk start ups look amazing, sexy and attractive...
For 2015, if you are thinking about jacking it all in, taking your final pay-check and opening a bar, cafe, on-line business blah blah blah; think again, take this quick idiot test and if you don't score well - polish up the CV and phone the agency in the morning...
  1. Are your great at Sales and marketing...? Yes = 10 No = 0
  2. Can you live for 12 months without any income...? Yes = 10 No = 0
  3. Is your idea radical, new and cutting edge...? Yes = 0 No = 10
  4. Are you likeable and attractive...? Yes = 10 No = 0
  5. Will you work 90 hours a week, with no holidays...? Yes = 10 No = 0
  6. Do you let life's drama become an excuse..? Yes = 0 No = 10
  7. Does your partner have an income...? Yes = 0 No = 10
  8. Is your ego bigger than your mortgage...? Yes = 0 No = 10
  9. Is adding value your #1 motivation...? Yes = 10 No = 0
  10. Do you have a Coach..? Yes = 10 No = 0

If you score less than 100; go get a job...

The Number Two reason a start up fails is...

The product or service never gets finished...
When someone has a great idea about a product or service, in their mind they can see it finished and working; the challenge is not the idea, its the execution...
Of course, all products and services can be refined, improved and developed over time. It's why we have the IPhone 6, Windows 8 and New Daz...
Speaking with a Startpreneur at a recent event, he was explaining to me how his product had been designed, refined, re-designed, tested, refined again and then tested yet again...
I asked him how many product he had actually sold in the last 2 years...
None - the product wasn't ready...
He was haemorrhaging around $500k a year, his investors were getting nervous, he wanted to build the perfect product but in the dazzling glare of perfection he had forgotten the small problem of cash flow...
If you are going to launch - then get the product and service "good to go..." but forget perfection - it simply doesn't exist...
At some point you have to let your idea float into the market and hope that enough people like it that they will actually pay money for the pleasure of experiencing it.
Launching is hard because it means that there a risk of failure, rejection and the dream being over - while things sit on the drawing board the dream is kept alive on the investors life giving transfusions of cash...
Many ideas simply die because they run out of time; the cash dries up or the market takes over and the idea itself becomes obsolete. If you are going to launch a business in 2015 - get 90% happy with it and press the launch button...

The Third reason a start up fails is...

It's a service that no one actually wants...
At a recent seminar in the UK, I was approached by a man with an idea; beam me up Scotty...
He showed me a prototype of an App that would transform the way we use social media, communicate with each other and build our business networks...
He absolutely loved it, he was excited and passionate about the idea and how much money he could make as a passive income in year 3 onwards...
Looking for investors and distribution partners, he showed me the App and how it could tag, transfer, message and arrange "face-time meetups in the real world.."...

Yawn...

First, I am the wrong person to pitch this to - I am not an 18 year old looking to get laid on a Saturday.
Second, the fact the HE thought this was a cool idea, doesn't mean that anyone else will; excitement and hope are not business strategies...
He had put his last £££'s into the development of the App - there had been no research, testing, control group study or even basic market research done - just an idea in the shower..
Sometimes the best ideas come to us in the shower - most times it includes what to have for lunch or buy for Christmas - not the multi million £ business idea that will make us a fortune and cure world hunger..

RULE...

Selling a new product to a new market is tough - don't be the first in your sector.
Follow Richard Branson and go second - he learned from Freddie Laker and created Virgin Atlantic...
Do your market research, find a great product or service that is in demand already, then do it better; innovation is expensive, use it to refine your product not define it..

Have a great 2015...

David Holland MBA is the Founder and CEO of Results Rules OK, a Business Coaching, Training and Publications Company with offices in France, Luxembourg and the UK...
To find out more about working with David as you Business Coach, Executive Coach or Team Trainer - just drop him a note to davidholland@resultsrulesok.comfor an introductory and complimentary discussion that just could change your life, your business and your results...
If you'd like to come to one of our Events to meet David, the Team and some of his Clients, then check out the website HERE - we look forward to seeing you and hearing from you...

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