By: Emma Miller
We’ve heard it time and time again – 90% of startups fail in the first five years of operating. Bad financial decisions, a poorly designed business model, a wrong product for the market, financial mismanagement, and bad timing are just some of the most commonly cited reasons why some businesses never manage to pass the five-year threshold.
But should you feel ashamed?
Not at all. In fact, many are those who obey by the old “learn from your mistakes” mantra. That’s how Autopsy was born – a platform where entrepreneurs gather to share their stories of business failures and provide young dreamers with advice on what not to do.
After analyzing countless mishaps, several pieces of advice stood out as the most universal ones and seem to be applicable to the majority of rising business ventures.
1. Celebrate smaller milestones
Though on the horizon there might be something much bigger you’re aiming for, don’t forget that you need to conquer many battles before winning the war. And make no mistake, the metaphor is quite accurate – it is a true battlefield out there.
Namely, a startup may set the goal to become a Unicorn one day, but it takes a multitude of steps until you even come close. It is imperative to outline a clear roadmap: define where you are now and where you want to be. Then start adding all the pit stops that need to be made in between and you’ll end up with a detailed plan for success. Celebrate each time you reach any of the goals and you’ll feel a surge of energy overwhelming you, acting as a motivating factor to keep moving forward, even if the ultimate result is years from now.
2. Prepare for the worst
After the first few goals are achieved, entrepreneurs start to see the entire world through rose spectacles and fail to prepare themselves for possible setbacks.
As you lay out the roadmap, it is good to enlist potential issues you might encounter along the way. Plan B is vital but know that in some cases you will have to go through the entire Alphabet before you take the right path. Mistakes and hindrances are inevitable, and all you can do is to prepare in advance.
This might entail setting up a savings bank account to act as a safety net in case you unexpectedly go over the budget or taking out a bank credit. It’s also good to have a legal professional on speed dial, just in case you need a few questions answered or a few issues fixed.
3. The success won’t happen overnight
Though it’s a cliché, young entrepreneurs still can’t seem to comprehend the fact that big bucks will not come pouring in just a few months after they start their business venture. Many factors influence what the final outcome will be and when the ultimate goal will be achieved – the type of business, the industry you operate in, the size of the company, investment capital, etc.
Take Đurađ Caranović’s success story as an example – starting with nothing but a strong desire to grow healthier crops, he left the big city and headed to the country. He points out, on many of his keynote lectures, his mistakes and challenges and how you should always push forward and utilize every learning for the future decisions. Today, he has in his portfolio one of the most successful agricultural exits in the region.
And did you know that even Richard Branson’s first business attempt, which involved selling Christmas trees, was unsuccessful? Or that Bill Gates ran a company before Microsoft that had no customers? What he did was take his experience from Traf-O-Data and used it to establish what is now the most powerful tech company in the world.
4. You can’t do it all on your own
It takes a village to raise a child, and we know you feel the same about your baby business. You will hardly be able to assess all business aspects at once and deliver the results you are expected. A legal professional, a financial expert, a team of marketers – these are just some of the positions that need to be filled to maximize the new venture’s potential. Know that even if you feel like you have some operational knowledge on a subject, it doesn’t mean it is sufficient to keep the business going without hiccups.
5. Sometimes customers are right
Failure to meet the market demand is one of the most common reasons why businesses fail. Though your product is of high quality, no one might need it, thus – it is unlikely it will sell and bring any profit.
Remember that your clients are your allies, as well. Start collecting the feedback from the moment you launch a product because it’s the fastest way to learn what your mistakes are and how they can be fixed. The quality of customer service cannot be stressed enough, and it is best to employ a team of people who will dedicate all their time to recording the comments and thinking of ways to perfect the idea and re-optimize your product or service offer to meet the market requirements.
6. Mistakes must be acknowledged
Although it must be easier to place the blame on others or the situation you find yourself in, more often than not the truth is – you had the chance, you just didn’t play your cards right. The sooner you accept your mistakes, the easier you’ll move on and come up with a new and improved business plan.
To be able to pinpoint all the mistakes and draw valuable lessons, put your goals into perspective. Were they unreasonable? Did you attempt to bite more than you can chew?
Next you identify the discrepancies: define the gap between what you expected and what actually happened, and you’ll get just a little bit closer to reasons why the endeavor was unsuccessful.
7. You need to stay positive
It was Thomas Edison who claimed that he never failed, just found 10,000 ways that won’t work. And there’s a reason why successful people keep this quote and a “hang in there” kitten poster at a visible place – because it is imperative to maintain a positive attitude. Mulling over the past mistakes will only keep you from planning for a better future.
You are bound to feel a little discouraged, just don’t let the feeling overwhelm you for too long. Take some time to analyze what went wrong and use the experience as another stepping stone. With every mistake you define, you learn a new lesson and enrich your knowledge.
By Emma Miller
About the author
Emma Miller is a digital marketer and blogger from Sydney. After getting a marketing degree she started working with Australian startups on business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University. Interested in marketing, startups and latest business trends.