Why Start-Up Fails

Nine out of ten startups will fail. This is a hard and bleak truth, but one that you’d do well to meditate on. We don’t want to sound pessimistic, but the truth is startups fail. A lot. Of course, this isn’t news. Entrepreneurs may even want to write their failure post-mortem before they launch their business. The optimistic entrepreneur still needs a dose of reality now and then.

Inevitably, you’ll see reasons like “ahead of it’s time, no market, not enough demand, ran out of cash, product mistimed, no investor interest, couldn’t secure funding, too early”, and on and on.

Interesting enough, you won’t see the most fundamental reason, and the one at the core of many of those listed above — not getting people to care. In large part, the startups that fail failed to get people — both customers and investors — to care about their products as much as they did.

It’s as simple as that. They weren’t able to break through the noise and seemingly infinite choices of how to spend our time and money.

So how do you get people to care?

Don’t just delight them, make them fall in love. Use your brand to create an emotional connection. Understand who your audience is and why your product should matter to them. Then convey your
“why” using your unique voice. Lastly, wrap it all up in an incredible experience that makes your audience buy-in.

Do this, and you’ll build an army of believers and advocates strong enough to ensure your startup doesn’t become one of the walking dead.

Are you really prepared to win?

The burst of the .com bubble and Eric Ries's The Lean Startup changed the way new products are built and launched. Incremental advances, staying lean and flexible and improving on the competition has been accepted — mistakenly as multi-billionaire investor and PayPal founder Peter Thiel notes in Zero to One — as dogma.

So, we cringe when occasionally we’ll hear startup founders say things about their branding, design and communication like: “What we’ve got is good enough” or, perhaps even worse, “we’re going to try and gain traction first and then we’ll work on addressing that”. Good luck with that.

Most startups during the early stages of their development make the huge mistake of ignoring the importance of branding. Many entrepreneurs tend to obsess on the product, and rightly so. But what is also important is researching and defining their target customer, and then creating a brand identity that will focus on the product’s benefits for them, before just pushing it into the marketplace.

The problem with that mindset is they’re disregarding their true differentiator and the most influential way to convert their target audience into an army of advocates, getting word-of-mouth to spread. They’re disregarding their way to win.

Disagree? Just look at any industry that sees the value of branding. Is Nike wildly successful because their product is superior? Or, is it because their brand evokes a feeling of aspiration? Is Coca-Cola the most valuable brand in the world (77.8B — 45% of their market cap) because of their recipe for cola? The list goes on.

Think about your favorite companies. Aside from bringing you enjoyment, what do all of them have in common? The answer is probably great branding.

Obviously, pre-seed startups and those with very little capital should limit their investments and focus first on validating their idea. But if you’re a startup looking to gain traction and grow, a brand-building should be a key part of your marketing efforts.

One of the main importance of branding for startups is that it helps the new organization establish its own identity. A brand is so much more than just the company’s logo, it is the whole personality of the organization. Having a clear vision will ensure the success of the startup in the long run.

Startup marketing and branding also help a startup set itself apart from the competition. A great brand name can be a solid competitive advantage for your company, especially when feature startup in the same categories with the same features. Formulating a brand positioning and identity requires that a new company conduct research into their customer base and the surrounding market. This, in turn, helps companies articulate what it is that makes them unique, and what particular problems they are filling in their respective markets. The ability to then effectively sell their unique contribution can bring in a variety of new customers who are looking for the specific product or service offered by the startup.

Don’t wait too long to discover the true, authentic purpose of your startup brand, and define why it matters to the people that matter to your business. It will be well worth your time.