Most startup companies that fail have the same problems in common. Here are the six common pitfalls that cause startup companies in the industry of cyber security to fail.
The media would have you believe that the path to Silicon Valley is paved with gold. The reality is that the startup world is actually paved with companies that barely lasted more than a few months after launching. The possibility of failure is a part of launching any type of company. The risk of failure rises even higher when it comes to companies that offer cyber security. Going to bed with a good idea doesn't mean you'll wake up as Steve Jobs or Bill Gates. Tech startup owners need to face the reality that an innovative idea is only the first step in a very long and difficult process of bringing a product to market. Why do so many startup companies in the IT sector fail? Take a look at the top six reasons why most IT startups don't last past the first year.
1. Lack of USP and Value
Every brand needs a hook. Customers are drawn to that one thing that a product or service can do to make their lives better like no other option on the market can. That one-of-a-kind thing about a brand that grabs the public is called its unique selling proposition (USP). Does this product save people money compared to what's already available? Is it unique in the way it's produced? Will it change how people do common tasks or make everyday actions faster? Many startups actually lack a clear USP. As a result, the product or service being offered disappears into the crowded sea that is today's marketplace.
How to Avoid: Every business needs that factor that makes it better than others out there. The thing that makes a business unique is also what makes its products valuable. A product or service probably won't make waves if it doesn't provide something different than every other offering in the same category.
2. Ignoring Customer Needs
There is a real reason why most successful companies have operated under the principle that the customer is always right for decades. You don't have a business if you don't have customers. Of course, you must be in touch with what customers need if you want to fulfill those needs. It is important to listen to what customers are telling you through their words and deeds.
How to Avoid: Keeping up with the changing needs of customers is an important part of staying relevant. In addition to paying attention to feedback from individual customers, it's important to keep up with what market trends are saying.
Nobody likes change. However, what people really dislike is constant change. It's usually a bad sign when a business constantly restructures and reorganizes. This is a signal to customers and investors that a company doesn't really know what it is or what it wants to be. The world can't have faith in a company that doesn't have faith in itself.
How to Avoid: Make sure you keep a tab on how things are changing within your startup and if these changes will have any major effects on the customers.
4. A Lack of Preparedness Regarding the Challenges of the IT Sector
The IT security field is one of the hardest industries to exist in. Business competitors, evolving security threats, rapidly changing technology and shifting regulations can make it feel like a company is constantly dodging disasters. Digital security simply isn't an industry for the faint of heart. Many people create startups without looking at the full picture when it comes to the challenges that are ahead.
How to Avoid: Startup owners need to be realistic about whether or not a good idea is enough to create staying power for a company. Research and development regarding how a company can exist and grow in the market it is trying to enter is an essential part of launching a business today. Startup owners need to have answers regarding total revenues, growth, profitability and liabilities before they can even begin to dream about bringing products to market.
5. Leadership Failures
A person who is able to come up with an amazing product isn't necessarily destined to be a great business leader. It takes a certain amount of humility for the founder of a startup to admit that it's necessary to create a leadership team that includes people who know about marketing, finance and optimization. Of course, it's important to make sure that a core leadership team is comprised of people with the same vision. Visible conflicts and squabbles can instill a sense of insecurity in staff members and investors. The bottom line is that a dysfunctional leadership team or inexperienced primary leader can cause quality people to jump ship before a business has truly launched. One of the most difficult aspects of putting together a leadership team is finding the right balance between adding people who see things in the same way and creating a group that can bring a collection of diverse and innovative perspectives to the table.
How to Avoid: Most successful tech heavyweights became who they are because they surrounded themselves with the right group of followers and collaborators early on in the process of launching a product. If you have big plans for your startup company, connecting with the right marketing minds and consultants from the start could turn your good idea into a true success story.