The startup – a bustling world of new opportunities, open frontiers, go-getting employees and unfettered success. Right?
Or is yours a hell of slumping workers, mounting bills, unhappy customers and limping fiscal years?
If current markets are anything to go by, the latter is the most likely. As the consumer downturn continues to hit the high street, shops are failing like classroom dunces next to the bright sparks of Amazon and Play.com.
And non-retail outlets aren’t faring much better. In 2012, more than 400,000 new businesses were set up in the UK. Out of that 400,000, more than 50 per cent won’t make it to 2015.
As the internet increases competition and globalisation, maintaining a startup (and stopping your staff thinking they’ll be looking for a new job next year) is like trying to turn back the tide.
But, outside of the markets, why do so many startups fail?
What’s the point of your product?
According to business website Fortune, 42 per cent of defunct businesses claimed they failed because the market simply didn’t need their product.
To many, this will seem like a cop-out. After all, the market is filled with highly successful products people don’t need (Do you really need to have voice recognition on your iPhone, for example?).
Apple co-founder Steve Jobs once said, “A lot of times, people don’t know what they want until you show it to them.” While completely frivolous items might fall at the first hurdle, the real reason behind a product’s failure might be more practical – your team didn’t market it properly.
Sorting the wheat from the chaff
Indeed, the hiring process is the biggest gamble you can take – those who seemed like sharks in interviews could turn into plankton when the job at hand is presented to them.
Staff with potential can, however, be nurtured to become the Don Draper-alikes needed to push any product. With a distance learning degree, on-the-job training or even a mentoring programme, employees can find new angles for marketing and development. They can create a better working environment.
In that aforementioned survey from Fortune, 23 per cent of failed startups claimed they had the wrong team.
Again, it’s easy for a business owner to deflect their own failings onto their employees – the right team coalesces with the right management and training.
Ultimately the failure of businesses comes down to a number of factors – but the buck always stops at the person on top.