Is Your Startup Failing? These 10 Strategies Can Turn it Around
Failing Startup face a lot of problems when they launch. Many times startups die a silent death only a few months from the launch. It could be running out of funds to survive, a product not picking up, a hostile market when tough competitors are involved, or fights within a team causing the failure of a company. These are just among the reasons companies fail.
In a study carried out by Harvard Senior Lecturer Shikhar Ghosh, about 75% of startups fail. That is quite a huge number. It is therefore not surprising that your company might be facing difficulties for one reason or the other. However, it is not late to change the course of your startup.
It might be costly changing the course of the company as compared to shutting it down but if that is not the case for you, read on to know how you can realistically turn the company around;
1. Listen and Act on Customer Feedback
We really listened to what our users wanted, both qualitatively listening to the words they say, and quantitatively looking at the behavior they take. – Mark Zuckerberg, Founder & CEO, Facebook
Startups are notorious for sticking to their guns in the hope that someday things will turn around. Customer feedback is key. If you have not been listening to your customers enough, start now.
You cannot develop a product in a vacuum where you ignore what the customers are saying. The best way is to listen to the customers as much as you can and then act on that feedback to build a product they will love.
Listening can involve doing very many things. Surveys, live chats, Q&A sessions, social media shares and comments, existing reviews, as well as face-to-face communication are all ways of listening.
If you are running a Saas platform, things like Q&A on social media, online reviews, social media engagement, and surveys can help you understand what it is that your customer needs.
Do not listen if you do not intend to act on the feedback. The goal is to listen, tweak your product or improve it, then listen again and repeat. Eventually, you have a product that is not just a result of your making but a result of your customers’ feedback. A product that satisfies a need.
2. Find The edge in Your Product
Don’t find customers for your products, find products for your customers. – Seth Godin
Several founders fail to understand their product’s unique offering. They have spent time and money building a product that is just like what exists in the market hence no unique benefit to a customer.
A product must have a uniqueness of some sort. It might be that out of the few features it has, one of the features is a stand out feature not offered by other companies; or a feature that this startup has bettered by improving on how it works.
Without a unique thing that sets you apart from the rest, it is difficult to find customers willing to leave the products they are currently using for what you have built.
3. Investigate the Suitability of Your Team
I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people not on strategies. – Lawrence Bossidy
The biggest mistake a startup can make is hiring a team that is unsuitable for the roles they are given. Entrepreneurs must hire well, and if they realize that they made a mistake they must fire fast. Mark Zuckerberg advocates for firing fast when a candidate is not a good fit.
If your startup is failing then this is a very important issue to interrogate. Look at your team and find out what their weaknesses are, if they are facing any issues that are affecting their performance and whether something can be done to change that.
For employees that are just unproductive and not good at their jobs, do not hesitate to let them go. Bad employees chase customers away.
4.Walk a Mile in Your Customer’s Shoes
You’ve got to start with the customer experience and work back toward the technology – not the other way around. – Steve Jobs
When was the last time you actually pretended to be a customer, subscribed to your own product or service and actually used it to achieve the objectives that you set out to achieve?
If you have not tried that then you should. One of the best ways to understand customer experience is to try being a customer yourself.
A lot of people build products that they would never use on themselves. How legitimate is your product as a solution to a problem?
By knowing how your customer feels about each and every product feature, you will be able to craft better solutions and work backwards to achieve a product that customers like.
5. Re-validate Your Idea OR Pivot
We rely on [customers] to help guide our product development and business strategy. Before we had any customers, we sat down with prospects to understand how our software could help them. When we launched the first version of our product in August of 2007, we had a paying customer from day one. — Chris Savage, Founder & CEO of Wistia
The concept of a startup is that it needs to have a few customers who have seen the need for the product you have made. Some of them can be gotten after the product launch while in many cases some people have managed to get customers way before they launch their companies.
If someone is already paying for the solution you are providing then that’s validation. If no one is paying for your product then you are probably building something that people do not want.
It might seem obnoxious but many are the times that the concept of “build, customers will come”has failed. You end up spending a ton of money and time building a product that people won’t dare to buy.
When you discover that you have built a product that is not picking up, it is okay to pivot. From your experience in business, have you seen a need that you can build a product for. Do not get stuck solving a problem that doesn’t exist when there is another problem that is in need of a solution. Pivot to that new product and save your startup.
6. Don’t Get Stuck in Your Ego
If someone corrects you, and you feel offended, then you have an ego problem. ― Nouman Ali Khan
Some entrepreneurs usually think that they have figured it out. When told to correct something they do not listen due to their belief that they could never be wrong.
Many founders are notorious when it comes to this. They lack self-awareness therefore missing out on the biggest hints that their companies are going under. Ego is a bad thing and it can easily destroy a company.
Founders with struggling startups need to realize that they are not the smartest person in the room; it is okay to be wrong; it is okay to admit it; and it is okay to correct the wrong for the sake of the company.
Startups already have low success rates. If yours is among the struggling ones, do not be an impediment to its success.
7. Utilize PR Strategies to Salvage Brand Name
A good PR story is infinitely more effective than a front-page ad. – Richard Branson
When your brand name is going down the gutter you have to find ways to salvage it. One of the best ways to do this is to secure media partnerships or media coverage to explain why your company is not doing what it is supposed to be doing and how that will be rectified in future.
Nowadays, PR services do not have to be expensive. You can practice do-it-yourself PR strategies to salvage your company’s name. Or you could employ the services of startup-focused PR firms like Pressfarm which charge very affordable result-oriented fees to help you save your company’s image.
Remember, publicity gained when you are apologizing to the media for not being a good startup showcases the human side of the company and can easily turn your image around. If there have been customer complaints, address them and say how you are working on correcting them. If there has been product misinterpretation by the market then make them understand what they should.
8. Use Lean Startup Methodology
As you consider building your own minimum viable product, let this simple rule suffice: remove any feature, process, or effort that does not contribute directly to the learning you seek. – Eric Ries
The lean startup way includes building a minimum viable product and avoiding overspending on things that do not necessarily improve the product.
For instance, if your startup has overspent on furniture, a nice office, etc, then it is a no wonder you are losing money.
Successful startups are cash conservative. They spend only when they need to and mostly to improve the product. Additionally, they ensure the minimum viable product is validated and has clients before ramping up on efforts to improve it further. Curb your startup’s spending on irrelevant things and follow the lean startup methodology to break even and grow your company.
9. Be More Transparent
The single most important ingredient in the recipe for success is transparency because transparency builds trust. – Denise Morrison
Are you transparent with your clients and employees? If you are not then it breeds mistrust between employees and yourself as the founder; while bringing up credibility questions between your company and the customers.
Be as transparent to your customers and team as you possibly can be in away that does not jeopardize the company. Keeping things away from them only makes things worse.
10. Eliminate Communication Barriers
The art of communication is the language of leadership. – James Humes
Are there challenges in communication at your startup? It could be a small team but it is filled with bureaucratic processes that hinder communication between the company’s CEO and the team or customers. Having too many managers who sieve information before it gets to the founder can be very detrimental to a small company.
If your startup was in a position where some things happened without your knowledge and you only knew after the act, then it might be worth considering that you are not in the communication channel.
For a startup, the communication hurdles have to be minimal to non-existent. As the company’s CEO, you have to get direct feedback from your team and customers in order to make good decisions.
Have you noticed something that could apply to your company? Let us know in the comments section or by chatting us up @thepressfarm