You’ve worked so…soooo hard for months. Years. You’ve worn down three keyboards. You’ve lived through more 120 hour weeks than you can remember. You’ve talked to countless investors, held neverending brainstorm sessions lasting until dawn with your co-founders, used far too much of friends’ and family members’ money (or crashed on too many of their couches), and literally felt ill when contemplating decisions that you knew — you just knew — represented turning points in your life.
You’ve done all your homework: read Inc. and Wired and Forbes and Entrepreneur and The Startup religiously for years, article upon article about how to market your app, everything you could get your hands on; talked for long, worthwhile, enlightening hours with mentors; interviewed the people who would actually use what you want to give them.
The day of your launch is nigh. You have collected a few thousand, or a few hundred thousand, potential customers or users for your product/widget/service, and built hype, and have a feel for how well your new “thing” will be received.
Or, to be blunt, you think you know. You might have data to base this on. It could be your gut instinct. Hopefully it’s a bit of both.
But no matter what, there is always the chance…the distinct possibility…that what you are putting out into the world won’t be as accepted as well as you think, or hope.
— In the time between your startup’s conception and launch, the market could have shifted.
— Your product’s audience is narrower than your research projected.
— Your pricing is all wrong.
— Disagreement (or too much compromise) has led to a “mushy”product and/or mission statement that no longer resonates well with your users.
— You place too much faith in brand recognition.
— The problem you thought you were solving is not the problem that actually needed solving.
Whatever the reason, you don’t see the registrations, the conversions, the virality or traction. Your churn is extreme. You’re losing users nearly as fast as you find them.
Not all start-ups come with the same obstacles stacked against them.
Business 101: Every industry, and vertical and product in each industry, follows basic rules of economics while offering challenges specific to itself. Your social app needs to offer enough supply (scale) to cover customer demand just like Joey’s NY Style Pizza has to be able to toss 400 pizzas on a Superbowl Sunday.
Based on a study by Shikhar Ghosh, a Harvard Business School lecturer, 75% of venture-backed start-ups fail to get investors a positive ROI. A third of those liquidate and cost the investors what they put in.
Out of general new businesses, the stats are rosier: 50% tend to survive 5 years, while about 25% make it to the 10-year mark.
What you choose to do is going to offer a host of problems to be dealt with that other entrepreneurs have already encountered many times over. But no matter what, there WILL be something that rears its ugly head that you probably won’t find in a book.
And just because you can’t find previous examples of whatever you’re facing doesn’t mean it hasn’t happened before. In all likelihood, it has…But the entrepreneurs who had to manage it never ended up with a successful business. The road to a billion-dollar exit is paved with the skeletons of those who gave up the quest after a failure or two.
What can you do?
You come away from your initial launch, bruised and bloodied.
Notice, I wrote “initial”. Because you are NOT DONE. You are going to launch again.
1. Bring in some new blood.
Your weak point may be a person or persons that is simply not doing a great job or not working and playing well with the rest of the team. Or maybe you need a new advisor (or two or three). Dump what you need to gain altitude, and bring on more experienced or talented team members.
2. Take the chances you might have been afraid of.
Sometimes the answer is to take things to another level. If you’re struggling for eyeballs, or you’re not seeing organic traffic or buzz, you might just need to get a little crazy. You might be a more conservative B-type personality who always believed your product will speak for itself. Now, biting the bullet and devising a strategy to really call attention to your business (or yourself) could be the thing that saves you. Don’t discount the value of giving your startup more personality.
3. Find out what’s happening directly from your users/customers.
No matter what, you need to do detective work. You should have built in some way to see what your users are doing, and at the very least do a some serious SQL queries and data analysis. If you haven’t been collecting customer surveys, start immediately before they dwindle even more. Make sure you cover all the bases, from UX/UI, to customer service and delivery.
4. Realign resources.
Related to #1: You might not have an issue with team members. They might all be superstars with high EQ. But maybe you just have them working on the wrong thing. Do a deep evaluation of everyone’s talents and you almost always find out that a significant portion of your team can do a lot more than you knew. You may even need to realign YOURSELF. Maybe you really shouldn’t be the CTO. You could be a middling CTO but make a superb CMO or CPO. Look at every possibility.
5. Consider…seriously consider…pivoting.
It’s one of those words that you hear too much, but it’s still an extremely valid option. You could be wrong in your assumptions about what your users need. You may have been too set in your ways, too zealous in your drive to force something to work that you were always certain was the very best thing for your customer. Or, the team you’ve assembled has core strengths that are better suited to something different. You might have a marketing startup, but be better at making content than selling it. If you do the P-word, you could save your business.
6. What is happening with your competitors?
Is there something going on with the broader market that is affecting you? Or is your competition accessing better sources of traffic or much better at SEO/ASO than your team? You might be able to narrow down many of your problems to the quality of your traffic or leads.
Ultimately, you need to view a launch failure as just another hurdle you have the opportunity to leap.
You can bounce back from almost any hit that has its root cause in the business itself. It’s about your resources, the market, and the users, which means a lot of it comes down to a math problem. Figure out your variables, work to get the right values to equal the result you need. It can be done, but it won’t be done if you give up.
Never, ever let your first failure also be your last.
Thank you for reading and sharing!
Tuesday, December 11, 2018