Conventional wisdom dictates that 90 percent of lean startups will fail. Although the number is a good bit less than that (it seems to be somewhere around 60 percent), many just starting out in their business like to get as much information as possible about what they can do to make sure that they are equipped for success. There are certain strategies and paths to take when just starting out, that can help down the road for the lean startup.
One major thing to look out for when starting your business is to ensure that your product is perfect for the market as it is. Fortune says that the top reason startups, and lean startups, fail is because they make a product that no one needs. Lean startups need to research the market and tailor make a product that will do well once released. One way to do this is to do consumer market research before release, or development of your product— tweaking your offering as the data comes in. Consumer market research identifies the markets unmet needs and existing products in order to create something that can fill a niche. This ensures that what you are creating a releasing, is going to fill a need and not overlap too much with a competing product. For lean startups, you can make a market research plan and use a great research methodology, using freelance marketers or even learn to do the research on your own.
Another step to take when starting out in your lean startup is learning how to properly fund your startup. Realize that a lot of the funding for your business will have to come from your own pockets. Investors won’t want to help a business that doesn’t invest in itself. 30 percent of small businesses break even whereas 30 percent end up losing money almost continuously. Make sure your business plan is well thought out and professionally presented. Investors are seeing more and more every day, as more lean startups are vying for their attention every day. Make sure you are ready to bootstrap because every penny counts. Defer purchases, telecommunicate, use existing equipment, and sharing office spaces are just some of the ways you can save a few bucks when starting out. Also, remember to network whenever you can.
If you can make sure your lean startup grows fast and grows fast quickly, then you can be sure that you are setting yourself up for success. This is because capital is needed right away to reinvest in the business. Rapid growth shows that your idea is working, and the market is primed and ready for your product. Wantful, a lean startup in NYC, shut down because they failed to accomplish “highly accelerated growth required to secure later-stage venture capital.” This is all too common, as 8 out of 10 entrepreneurial ventures fail within 16 months, mainly due to cash issues.
When planning for your start-up, make sure you allot time and resources for marketing. Marketing, especially inbound marketing, is king these days. Make sure you set up a CRM and track your customers. Set up automatic mailing systems and personalize the emails with your customers’ names. You will also want to have a very strong social media presence. It is almost unheard of these days for a business to not have a social media presence. 88 percent say they are embracing social media to get the word out about their business. Without a digital presence, it will be really hard for your business to succeed. A strong online presence and inbound marketing program can seriously help your chances of becoming one of the few enterprises to make it in the market.
Lean startups take a lot of planning and time to make them work. If you get the right team onboard, one that can adapt to changes as they come, then you are setting yourself up for success. A team that cannot adapt, cannot last in the ever-changing market. If you get knocked back, your startup team must be able to pick itself back up and trudge onward. One of the things that make a business susceptible to failure is if the founder of a company does not have a partner or partners. This is usually because collaboration is key in helping a lean startup to succeed.
Whether you are just starting to think about creating a business plan, or you are well on your way, anyone can benefit from these tips for success in ensuring your lean startup succeeds!