How to avoid failure and grow your startup in 2023

For most companies, the end of the year is a time of balance sheets and conclusions. It is a decisive moment of the year when the entire work team meets to analyze how many objectives were achieved and what strategies to plan for the following year.

In the particular case of startups, this is a critical period that can determine the continuity of the business or its disappearance. The failure of these companies is more common than you might think. In fact, 90% of startups never end up being consolidated. 

In a changing and constantly evolving market, these new entrepreneurships are in a continuous learning phase. Mistakes and lessons will emerge from this process, which entrepreneurs should not overlook if they want their business to prosper.

If you want to know how to avoid failure and grow your startup in 2023, continue reading the article.

Why do startups fail? The 7 most common mistakes

Overall, emerging companies, such as startups, have a higher failure rate than established companies. There is a multiplicity of factors for which a startup does not succeed, so it is important to learn to identify them to avoid falling into them. 

Based on a thorough analysis of the failure stories of 101 startups, CB Insight was able to determine several recurring patterns that each of these companies tend to fall into. 

Let's explore some of the major mistakes:

1- Lack of liquidity

The loss of liquidity is one of the main reasons why a startup fails. It can happen that a company has liquidity to start, but that it loses it as it develops or due to the lack of funding and investor interest. 

The sources of financing are precisely those that will allow the growth, development and improvement of each of these enterprises. For all this, it is necessary to efficiently manage the available capital and to actively raise money. 

It's critical that you secure adequate and sufficient funding to get started. Once you are clear about how much money you need, it will be time to look for investors or incubators whose objective is to promote all those emerging projects that they consider most viable.

2- There is no market for your product

The second reason why startups don't take off has to do with the fact that these ventures are unable to meet any market needs. Most of the time this happens because we don't properly address customers who have a problem or need that our product can solve.

To avoid falling into this error, it will be key to analyze and identify: market needs, our potential competitors and our future target customers. At this point we must make sure:

  • Satisfy a specific need.
  • Resolve customer pain points.
  • Understand what need I am seeking to solve and to whom a pain or a problem represents.
  • Analyze if it really involves pain for the customer segment we have identified.

3- Lack of business model

A business model is a detailed description of the future of your company that describes how it will deliver and generate value for customers. It is a key factor in determining the continuity of a startup. 

A viable business model should be one of the first steps on your list, since from it you can guide yourself in the next actions.

4- Lack of competitiveness

While paying attention to the competition is no guarantee of success, ignoring it completely is not convenient either, since it is another reason that explains the failure of startups. Therefore, it is important that we know what other companies we are facing, evaluating their strengths and weaknesses.

5- Wrong pricing policy

One of the most decisive decisions is to find the right pricing policy, since the poor valuation of the price of a product is another mistake that startups tend to fall into. To avoid this, it is important that this price is sufficient to cover costs and generate benefits, but low enough to attract consumers.

At the end of the day, how we communicate the full value of everything a startup does will be critical for users to understand and accept the price.

6- Wrong equipment

Startups are companies that are born, grow and consolidate in the market supported by technologies. Often, the lack of technological training and the scarcity of technical profiles can lead to business failure. 

In order to prevent this from happening, startups are obliged to have technical profiles that help develop the product. At this point, skills in programming languages, project management, agile methodologies and digital platforms are essential to ensure the growth of these companies.

An adequate work team is essential to create and develop this type of business. The people who make up these teams must have disruptive ideas that transform realities, solve problems and create opportunities. 

Nowadays it is imperative to have reliable experts who are always available when you need them most. OH eCommerce Agency is always there to help and cover your online store. 

Find out how we can help you.

7- Unfriendly to the user

A large part of startups fail to offer an intuitive product for users. The success of a startup lies in truly understanding customer needs and then responding with products and features that meet those needs. 

If you want to succeed in an ever-expanding market, you'll need to offer more than just a generic user experience. Customers expect a relevant and personalized digital experience, and today's businesses need more agility, flexibility and creativity than ever.

At OH we can help you develop and offer unique experiences for each of your customers. With the help of our experts, you will get a customized store adapted to the objectives of your business.  

How to create a startup and not die trying

Faced with a context of increasing uncertainty, the launch of a Minimum Viable Product (PMV) is an indispensable step for startups to avoid risk. This will allow them to measure the viability of the business and give them time to pivot quickly, minimizing the economic impact. 

A PMV is not a final product, it is a primary version with the basic features to be able to implement the product. Its main objective is to quickly realize the idea in order to be able to validate it in the market.

In short, it is a set of elements that we need for our business to work consisting of:

  • Minimum of resources needed for it to launch.
  • Minimum of features in terms of business model.
  • Maximum number of elements validated by the Early Adapters.

This first version will allow us to verify the functionalities and the reception from customers with the minimum possible risk and without having to invest large sums of money. Learning is the main objective of this version.

 Benefits of launching a PMV

Saving time and money

The PMV is the fastest and cheapest product we can build. In short, it allows us to get to market quickly and prevents us from wasting time adding new features to our product. 

Based on this, it is important to keep in mind that the longer we take to go to market, the longer the launch process will be delayed, the longer it will take us to develop it and the more money we will have to invest. Therefore, focusing on the fundamental features and launching the product is crucial to saving resources.

It allows us to know the interests of our customers

The PMV allows our product to be quickly tested by potential customers, obtaining their first impressions. This will help us to measure the reactions, opinions and ratings that customers have of our product.

This first version will provide us with real feedback so that we can be guided by real data rather than by mere intuition and assumptions. In addition, it allows us to understand what customers want and to apply it correctly.

It allows us to validate our product

This stage can be really decisive for your business because it will allow you to validate your market and determine if our potential customers want the solution we are offering them. 

The MVP is the prototype that will help your user achieve their objectives. The objective is to test the operation, interaction and usability of a product.

Why is it important to validate?

  • We get direct feedback from the user.
  • Avoid unnecessary discussions with the team.
  • It helps us to detect specific problems.
  • It helps us to understand the behavior of users and their mental model.

With the validation, we get feedback from the user and it's time to decide which part to work on until a new validation.

Improve

The MPV helps companies to validate the product and improve it and then launch it to a wider audience. Thanks to customer feedback, we can make the appropriate adjustments, postpone the launch date of our product or even suspend it until it is aligned with the needs of our market. 

Learn

Based on customer feedback, we can identify what actually creates value and what doesn't. Depending on this, we can move forward or pivot on the characteristics of the product, the technology used or the architecture of the business.

Avoid failure with a personalized eCommerce experience

Nowadays, there are many ways to develop and launch your MVP depending on your product or service. Building an online store could be an ideal alternative because it will allow you to develop a consistent user experience, measure customer feedback and test the market more quickly.

You should first launch a partial version of your site in order to attract users who can use your product quickly. In this way, customers can get to know your product and test it at the same time, you will be able to get feedback from customers and evaluate its viability.

eCommerce platforms have different tools so that you can know the reaction of your users. Through different metrics, you can measure the time that users stay on your site, the most visited pages, where in the funnel they tend to leave the page or what part of the store produces the most engagement, among others. 

The biggest benefit you'll get will be learning from your potential customers right from the start. This will help you improve many aspects, correct others and thus create a final product according to the needs of real customers. 

To innovate and make a difference in your niche market, it's important that you have a sufficiently agile and scalable eCommerce environment. Adobe Commerce is a solid platform prepared for all those startups that are ready to grow and sell. 

Adobe Commerce has different tools that can greatly improve the customer experience. These tools will help us to better understand their needs, anticipate their wishes and offer them products that are better suited to what they are looking for.

If you want to learn more about the benefits of building your store in Adobe Commerce, we've prepared this article

Conclusion

In a scenario where only failure can be seen, surviving and thriving means innovating or taking the risk of being surpassed by the competition. As we saw throughout this article, the success of a startup will be subject to the possibility of having the right technical team to work together to offer a unique and differentiated experience to customers.

eCommerce is a trend that has allowed many businesses to attract more customers, increase their sales, reduce costs and improve their profits. This is a great opportunity for startups to jump on the digital wave and take advantage of having an online presence.

Since the pandemic, this sector has experienced exponential growth, and its numbers are expected to continue to grow in the coming years. In this scenario, the user experience we provide becomes fundamental.

At OH we want to help you start your project so that you can save effort, time and money. We are experts in guiding startups to adapt their business ideas with the best e-commerce platform on the market, creating successful, scalable, reliable and robust e-commerce experiences. 

If you are looking for a development team in Magento and Adobe Commerce, our team of professionals has the necessary experience to guide you throughout your journey. At OH we adapt to the needs and objectives of your business, forming an exceptional team.

If you need a push to launch your project, do not hesitate to contact us