Startup businesses are regaining their foothold in the US economy. Last year, the number of new startups was the highest in 20 years, and ended a five-year decline.
Startups are different from small businesses in a few important ways:
- They exist to test a new idea or model that can potentially shake up the market
- They intend to become the new industry standard through investment and growth or acquisition by a larger company
- Startup founders want to share the company with others who have similar interests
Frugaa – a successful startup had a unique business idea in a couponing venture and they leveraged it to provide an ultimate and satisfying shopping experience in this day and age.
What kinds of businesses succeed? In a nutshell, those that are needed most regardless of the local or national economy. Services for seniors, ranging from housing to in-home care and physical therapy, are doing very well, with franchises showing particular success. Marijuana clinics are among the fastest-growing business in states that permit medical marijuana or personal use.
On the tech side, Citrix says the Internet of Things (IoT) is a potential $14 billion-plus market. (1) This industry seeks to use mobile technology to control devices that range from those in “smart homes” to drones. Sensor technologies using Bluetooth’s new Low Energy beacon used in Apple’s iBeacon will do well. So technologies will be used to strengthen cloud security and IoT transmissions.
While half of all new businesses are said to fail within five years, that number falls when you consider that half of this number (25%) fail in the first year. And the number of business failures keeps dropping with each successive year. Plus, people learn from their mistakes. Those who launched businesses in the past are more successful the second time around.
If you’ve launched a startup or are preparing for this, read on about six common mistakes that can derail your idea before it gets a fair shake.
- Waiting Too Long to Start Up!
- Launching a Startup Entirely Alone
- Being Afraid to Spend Money
- Refusing to Talk About The Project
- Clinging to Old Ways
- Forgetting to Enjoy Yourself
Startups shouldn’t wait too long to get moving and launch, app developer Jonathan Wegener told Mashable. Some startups build too much before the launch than is necessary. A new product doesn’t need to be fully functional to launch a startup: it’s the idea that’s attractive to investors and others who sustain startups once they have been out there for a while. (2)
It’s lonely, and a little scary, at the top. Even if you’ve launched your startup, don’t hesitate to consider taking on a partner.
Paul Graham, a writer, venture capitalist, and computer scientist who created the prototype for spam filters, advises startup founders not to go it alone.
Jobs had Woz. Gates had his Dad. Very few entrepreneurs remain alone or even launch startups on their own.
Startups are headed by entrepreneurs who might be used to doing a lot on their own. Some are reluctant to hire or contract people to handle necessary functions like paying bills, purchasing parts, and marketing the product. This can distract them from getting the important work done.
Startups practically created the new contractor economy; follow this practice and identify contractors from marketers to accountants, preferably with experience in your field. LinkedIn is a great resource for this.
Few new ideas really exist in a vacuum. Even if you’re the smartest guy in the room, chances are potential angel investors have heard about and seen something similar to your project in the past. You will stand out to them by taking another approach.
Steve Jobs didn’t invent the computer mouse. He saw a demonstration of a prototype mouse during a visit to IBM. Then he went back to his office and told his designers about it and gave them ideas about how it could work better.
Did he steal the idea? Not legally. No one had patented this thing and even if they had, Jobs’ approach was different enough to make it unique.
Talk about what you’re doing to the right audiences. Go to tech Meetups and conferences. You might find an eager collaborator or someone with money to burn on backing your idea.
Furthermore, you need to test your prototypes. Meetups, investors, and others in your field can be great sources for honest, non-competitive feedback. If you’re really worried about someone stealing your work, get a lawyer to draw up a nondisclosure agreement (see #3).
Graham also warns obstinacy can derail startups. Startups, he says, are like science: look at the evidence and take the logical path even if it means making major adjustments to your original assumptions.
If you really get stuck on whether to choose Option A or Option B, talk to your collaborators and prototype users discussed in #4.
Consider how websites have evolved from single pages to thousands. An ecommerce site like Frugaa can easily grow from a few hundred pages to thousands. Someone had to rethink how to make sites like these fast and responsive to their users.
This last item is probably enough to derail any business, whether a startup or a competitive small business breaking into the local market.
Try to remember why you’re doing this to begin with. You’ve already worked for other people, making their profits and working according to their rules. Someone else decided everything from the hours you should work, the location, even when you should have a break or meal.
Now that you’re in charge, have a little fun.
- If you and your team like background music, play some or let them use ear buds if tastes are radically different
- Wear what feels comfortable when you’re deep into development
- Bring in bagels one morning and order in lunch from an interesting new carryout
Startups are an opportunity to investigate ideas and approaches that the mainstream industry hasn’t considered. If you have a notion you’re convinced could work, talk it over with potential partners, both technical and financial. No good effort is ever wasted when it’s done in the right spirit and with the right people and resources.