When I set up Designbull in 2006, I made mistakes at the start – still do. But I learned from my mistakes and gained success.
I’ve grown as a business – yet stayed agile. How? By working with a team of trusted associates, I’m able to scale to match a large branding or website project, or remain small for consulting and logo design projects.
I’ve seen many business start-ups grow with success and some unfortunately fail. Why? There are some figures that claim as many as 90% of startups will ultimately lose money. And money pays the bills.
So why do so many startups fail and more importantly, what can you do differently?
We’re not just talking about failure when your brand or website launches, we’re talking about failure before you even make it online.
As a startup, you need an audience, and the best audience is one that has a problem – a problem that you’re going to solve. Startups that fail throw money at acquiring customers before they have even determined exactly who those customers are.
But spending the majority on marketing first is the fastest way to drain your funds with absolutely no promise of return.
Just because you build it, doesn’t mean they will come. Before you build, before you start spending on marketing, you need to define your brand story, your users and their journey and determine your market fit. Gather as much feedback as you possibly can. This isn’t a problem you can throw money at. You have to do the groundwork.
One way of knowing your future customers is to build an email subscriber list through your site by providing them with useful and valuable content that’s relevant. Engage with them, ask them what they want. They will like and trust what you do and will buy from you. It is very cost-effective.
Staying agile as a start-up business is crucial. Growing fast means you’re burning money fast and don’t plan for any worst case scenarios. It’s easier as a small, focused team, but as you grow and take on outside people you need to stay flexible.
A common mistake is hiring ‘experts’ too early. Spending money on future marketing or customer acquisition instead of putting your efforts toward validating your product or service first. So you have to make sure you’re targeting the right market and customer or user before you start spending.
Once you find the right audience that needs your product or service how do you grow? The Holy Grail of all new start-ups is how to get a customer quickly, and at a lower cost, than the revenue that is being generated by those customers. Then it’s a matter of getting new customers without over-increasing your cost.
You shouldn’t start spending money on marketing or branding until you’re crystal clear on your business model and strategy. Keep it focused – stay agile. Know your audience and get a solid strategy and roadmap in place before you start investing in marketing. If you don’t, you’ll be out of money before you know it, with nothing to show for it. If you’ve done your research, however, you’ll have a product that you know customers want, then you’ll be joining the 10% of business startups that succeed!