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Entrepreneur's Cauldron: Why Startup Fails?
By Owais Zahid, Senior Web UI Developer And Scrum Master, Fusion Lifecycle, Autodesk
We are living in an age of entrepreneurship. There is a growing trend of people preferring risks and self-employment over traditional jobs. This has been a major shift and will continue to go strong in future. With all these disruptions and chaos surrounding us, there is a greater need to understand how we can make our products, services or any other tangible outcomes better.
Everything starts with an idea and translates into a reality. As entrepreneurs, we embark on the same journey to create meaningful and relevant solutions for our customers. People are more motivated, tend to work harder and collaborate more effectively in a startup culture as they have a decent team culture and an efficient communication process. More often than not, these endeavors do not give us the desired results. In fact, majority of startups fail to make a mark and fizzles out. It doesn’t mean that the effort is not adequate or the resulting product is not good enough. Whatever be the case, the success of any venture is largely determined by customer satisfaction and sustainable efforts.
There is no easy drive to the destiny. There are pitfalls in the path of success. Avoid them is avoiding failure.
“ Entrepreneurship is a creative process that gives you the ticket to the front seat.”
Pitfall #1: Set up to be acquired
Entrepreneurship is a creative process that gives you the ticket to the front seat. The goal should be to make a difference, provide a solution to an unsolved problem or a better way of solving a problem. On the contrary, myopic goal is to focus on short term success and to make a quick impression that does not make a lot of difference. The most common example is to start a startup with a goal to be acquired by the big player. This can be lucrative but not all the times. Most of the startups die down quickly either through acquisitions or lack of it.
Pitfall #2: Not thinking Long Term
Entrepreneurs start small due to limited resources. To save up on time and money, tough decisions are to be made. But compromising on long term aspects will adversely affect the sustainability of the product.
There is a need to have a clear plan for success because with success the demand for the product increases exponentially. Do you have necessary plans to scale?
Pitfall #3: Not Focusing on Quality Goals
Quality goals or non-functional requirements usually play a second fiddle to the functional aspects. How the solution works is very important, but if quality goals are not set and properly tracked from the start then it is a worrying sign.
Non-functional aspects like accessibility, performance, responsiveness should be considered at the start of the project. They can influence the design and architecture of the project. Trying to incorporate them later in the project timeline would be costly. It is recommended to have a clear and an agreeable plan about the quality attributes of your solution at all times.
Pitfall #4: Customer Expectation is not aligned
If you ask anyone about what ‘real time’ application is, the most common answer you will get is “an application that can process at a very high speed … almost instantly”. Instead, real time applications must guarantee response within a specific time period, which may or may not be instant. This example shows the gap in the user expectation and the application’s actual capability. Therefore, it is very important to be aware of these expectations and how to reconcile them.
Customer expectations and requirements changes with time; this change is hard to predict due to its non-linear nature. This is a complex problem where a subjective space of customer’s preference and criteria needs to be projected in the objective space for the development of a solution. If not done carefully the resultant project will not meet the expectation of the customer. Since the requirement will change with a passage of time, it is best to engage customers in the development process and ask for their feedback on a regular basis.
Pitfall #5: Customer Inertia
Coming up with a revolutionary idea or a next big thing is a driving force in an entrepreneurial or startup culture. There is a possibility that the novelty or uniqueness of your idea will make your product a massive success with your customer base. However, this may not be the case all the time. For instance, first-mover advantage can also turn into first-mover disadvantage if the expectations and needs of the customers are not met properly. In this way, you will end up paying the road for others to roll and avoid making the same mistake you made.
The main problem with new ideas is its demand for a change. Despite we are born to adapt to change but still it’s inherent to resist to that change at first. So efforts are needed to break that inertia. This is where most of the originals fail. This is a perfect situation for solutions that are not unique but unique enough to be distinguishable to take the market by storm.
Conclusion: Entrepreneur’s cauldron is my interpretation of fragilities and volatilities of modern business world where the outcome can change drastically with the understanding and management of influential factors.