Search

Lessons From Start Ups That Have Failed

The statistics look bleak. Nine out of ten start ups fail…and only a quarter of them make it beyond that all-important first year. But this doesn’t seem to be dissuading hopefuls who continue to jump onto the entrepreneurial bandwagon like never before. Anyone and everyone with an innovative idea is hit by the urge to be the next superstar on the start up horizon. Starting a new business is often a roller coaster ride, with mostly downs and not many ups. So what makes this failure rate so high? Let’s do a post mortem, so that new enthusiasts can create a risk management plan and learn from their mistakes. In fact it’s customary for start ups that fail to pen down their reasons for shutting shop. A research report submitted by cbinsights.com had the key driver of failure as the lack of real market need. This happened to Treehouse Logic, a next-gen visual configuration platform that helped brands to build ecommerce sites using product customisation experiences. They underpinned their failure on the fact that they weren’t solving a market need. Too many start ups are launched without adequate research, with the result that the product or service on offer is not what the end-users want. When the product fits a missing gap in the market jigsaw, it tends to do better. Today, sites like Survey Monkey offer a very easy way to check the pulse of the market and find out what’s hot and what’s not. Lack of adequate funding was the second most quoted reason. Quirky, a startup launched in 2009, was an exciting invention platform where concepts were described and people could vote for the idea they wanted converted into an actual product. Margins were thin and the cost of creating prototypes of the winning ideas turned out to be prohibitive. Every new venture needs a team that has diverse skill sets- someone who is business savvy, another who is an ace at marketing , and obviously those who have in-depth knowledge and experience of the business itself. If the team isn’t right, then that’s another big reason for the lack of success. Recruiting portal Standout Jobs had a great product and adequate funding, but the founding team wasn’t able to build a Minimum Viable Product (MVP) on its own without outside help – and they didn’t think to take on co-founders who could pitch in at that point in time. Competition is also stiff, and when the market gets hot there will be plenty of wannabes who want to piggyback on your success. If your competitor delivers a product that meets user needs better than yours, then chances are that he will succeed and you may not. Personal finance management platforms Wesabe and Mint were very similar at heart, but Mint saved people money from the start and ended one-up on its precursor Wesabe. Start ups often have issues with pricing their product right. They struggle with fixing a price that’s attractive to customers, yet brings in enough money to allow the business to run. You need to look for the perfect price point- determine your actual running costs, how much business you need to generate to be profitable, and check out whether the market will support the selling price you have arrived at through this analysis. Zirtual, an on-demand virtual assistant provider, closed down very abruptly when they found the company had overstaffed itself without having matching demand- and their pricing wasn’t enough to match up to the costs of running a full time employee pool. Then there are the ventures that get enmeshed in red tape and regulatory demands. Homejoy, a favourite of the media, offered low cost cleaning services and took on bookings through an automated software platform. Worker misclassification issues led to heavy lawsuits that choked the company, ultimately shutting it down. Music streaming service Grooveshark didn’t secure licenses for the music they streamed, and ran into problems with copyright violations. Start ups need a viable business model. Optimism rides high at the start of any venture, and, when reality sets in people find that customers aren’t really beating a path to their door. If the cost of acquiring new customers is higher than envisaged, the business model may fall flat. Again, if the business model is not scalable, then the growth will not be sustainable in the long run. Failure is often a stepping stone to success, though, and many first time failures have gone on to be successful at their second venture. Case in point: most people don’t know that Microsoft was built on the ashes of a company that didn’t even see the light of day. Bill Gates and Paul Allen had tested the waters with a company called Traf-O-Data, which never got off the ground! The experience they gleaned from this venture laid the foundation for creating software giant Microsoft. Even if 90% of new ventures fail, do your homework on the 10% that do get it right. With a foolproof risk analysis plan, you could just hit upon the new-age mantra for success!
Rated 4.5/5 based on 20 customer reviews

Lessons From Start Ups That Have Failed

4K
Lessons From Start Ups That Have Failed

The statistics look bleak. Nine out of ten start ups fail…and only a quarter of them make it beyond that all-important first year. But this doesn’t seem to be dissuading hopefuls who continue to jump onto the entrepreneurial bandwagon like never before. Anyone and everyone with an innovative idea is hit by the urge to be the next superstar on the start up horizon.

Starting a new business is often a roller coaster ride, with mostly downs and not many ups. So what makes this failure rate so high? Let’s do a post mortem, so that new enthusiasts can create a risk management plan and learn from their mistakes. In fact it’s customary for start ups that fail to pen down their reasons for shutting shop.

A research report submitted by cbinsights.com had the key driver of failure as the lack of real market need. This happened to Treehouse Logic, a next-gen visual configuration platform that helped brands to build ecommerce sites using product customisation experiences. They underpinned their failure on the fact that they weren’t solving a market need.

Too many start ups are launched without adequate research, with the result that the product or service on offer is not what the end-users want. When the product fits a missing gap in the market jigsaw, it tends to do better. Today, sites like Survey Monkey offer a very easy way to check the pulse of the market and find out what’s hot and what’s not.

Lack of adequate funding was the second most quoted reason. Quirky, a startup launched in 2009, was an exciting invention platform where concepts were described and people could vote for the idea they wanted converted into an actual product. Margins were thin and the cost of creating prototypes of the winning ideas turned out to be prohibitive.

Every new venture needs a team that has diverse skill sets- someone who is business savvy, another who is an ace at marketing , and obviously those who have in-depth knowledge and experience of the business itself. If the team isn’t right, then that’s another big reason for the lack of success. Recruiting portal Standout Jobs had a great product and adequate funding, but the founding team wasn’t able to build a Minimum Viable Product (MVP) on its own without outside help – and they didn’t think to take on co-founders who could pitch in at that point in time.

Competition is also stiff, and when the market gets hot there will be plenty of wannabes who want to piggyback on your success. If your competitor delivers a product that meets user needs better than yours, then chances are that he will succeed and you may not. Personal finance management platforms Wesabe and Mint were very similar at heart, but Mint saved people money from the start and ended one-up on its precursor Wesabe.

Start ups often have issues with pricing their product right. They struggle with fixing a price that’s attractive to customers, yet brings in enough money to allow the business to run. You need to look for the perfect price point- determine your actual running costs, how much business you need to generate to be profitable, and check out whether the market will support the selling price you have arrived at through this analysis. Zirtual, an on-demand virtual assistant provider, closed down very abruptly when they found the company had overstaffed itself without having matching demand- and their pricing wasn’t enough to match up to the costs of running a full time employee pool.

Then there are the ventures that get enmeshed in red tape and regulatory demands. Homejoy, a favourite of the media, offered low cost cleaning services and took on bookings through an automated software platform. Worker misclassification issues led to heavy lawsuits that choked the company, ultimately shutting it down. Music streaming service Grooveshark didn’t secure licenses for the music they streamed, and ran into problems with copyright violations.

Start ups need a viable business model. Optimism rides high at the start of any venture, and, when reality sets in people find that customers aren’t really beating a path to their door. If the cost of acquiring new customers is higher than envisaged, the business model may fall flat. Again, if the business model is not scalable, then the growth will not be sustainable in the long run.

Failure is often a stepping stone to success, though, and many first time failures have gone on to be successful at their second venture. Case in point: most people don’t know that Microsoft was built on the ashes of a company that didn’t even see the light of day. Bill Gates and Paul Allen had tested the waters with a company called Traf-O-Data, which never got off the ground! The experience they gleaned from this venture laid the foundation for creating software giant Microsoft.

Even if 90% of new ventures fail, do your homework on the 10% that do get it right. With a foolproof risk analysis plan, you could just hit upon the new-age mantra for success!

Usha

Usha Sunil

Blog Author

Writing is Usha's hobby and passion. She has written widely on topics as diverse as training, finance, HR and marketing, and is now into technical writing and education. She keeps an interested eye on new trends in technology, and is currently on a mission to find out what makes the world go around.

Join the Discussion

Your email address will not be published. Required fields are marked *

Suggested Blogs

How Important is training & development in 2019

Training and development is critical for any professional. It helps you improve your performance and helps your organization meet its business goals. Building new skills makes an individual more efficient at a job or capable of handling different responsibilities and challenges. Developing skills is possible at the place of work or away from employment. While on-the-job learning is more likely to be cost-effective and pertinent, professionals generally undertake off-the-job training. Training offers a major chance to nurture the knowledge base you have, but many find the development opportunities cost prohibitive. Professionals often have to compromise work time while attending training sessions, which may influence the completion of projects on time. Despite the possible downsides, training and development present both the individual and the company as a whole, the benefits that make the cost and time a valuable investment. Here are some positive outcomes of ongoing training and development: Overcoming Limitations Most professionals confront some disadvantages at their workplace skills. A training program helps you reinforce your skills and acts as an impetus for improvement. It closes any gaps in your knowledge and offers you the ability to complete basic work tasks on our own. Enhanced Performance A professional who receives the necessary training is better able to perform one’s job. The training strengthens your confidence because you have a deeper understanding of your role and responsibilities to perform even better and think of new ideas that help you excel. Uniformity A well-planned training and development program ensures that you have a uniform experience and background knowledge. The uniformity in what you do is particularly pertinent for your growth and improvement. Work Satisfaction Individuals with access to training and development programs have the edge over others in the market. Professionals who feel acknowledged and challenged through training opportunities may feel more satisfaction toward their jobs.
Rated 4.0/5 based on 20 customer reviews
How Important is training & development in 2019

Training and development is critical for any profe... Read More

5 Certifications That Will Boost Your IT Career

Information Technology has evolved exponentially in the last few decades. It has touched our lives in more ways than we can imagine. It is used in almost every field and every company. This is one of the main reasons people are opting for a career in the IT industry. There are millions of companies around the world that provide one or the other form of IT service. How can you stand out in a field in which millions of individuals are already working and one where many more individuals join every year? A certification from a well-known institute could enable you to achieve this. The certification need not pertain to a single component of Information Technology. It could be in the field of data securities, software development, data analytics, software testing, web development, etc. All these areas are widely used by companies around the globe. 1) CISSP CISSP stands for Certified Information Systems Security Professional. The certification is issued by (ISC)2. It stands for International Information Systems Security Certification Consortium and is an independent data security certification. The goal of this certification is to ensure that the candidate has the required knowledge to handle all the data security systems and procedures at his workplace. This is one of the best and in-demand certifications available for data security. You will need an experience of 5 years in order to pursue this certification. Once you complete this certification, your salary will be in the range of $73,000 – $119,000. 2) CompTIA+ If you’re a beginner in the field of information security and are looking for job opportunities to start your career, this is the course for you. This certification tells employers that you are well-versed with the basics of the subject and possess the skills to keep corporate systems secured from hackers. Since this covers the basics of information securities and is not attached to a particular software, you will be able to find job opportunities around the world. After the completion of this certification, your salary will be approximately $86,000. 3) ITIL Considered as one of the best frameworks for Information Technology Service Management, ITIL is being adopted by various organizations around the world. ITIL is also used for setting quality benchmarks in a firm. There are many levels of ITIL certification based on your level of expertise. The ITIL foundation training course meant for beginners is known as ITIL Foundation course. It has concepts that clearly explains the key components of ITIL v3. The other levels are Practitioner, Intermediate, Expert, and Master. The ITIL foundation certification training is also useful managers and other leadership roles. Your salary after the completion of the information technology infrastructure library ITIL certification will be $95,000. 4) PMP Project Management Professional (PMP) is a project management certification program. You must be wondering how a project management certification helps you in your IT career. These days most of the information technology work is based on projects. Therefore, if you are proficient in the skills required to be a project manager, you will be a very valuable asset to the company because you have technical knowledge as well as management skills. As a project manager, you will be delivering projects within a given schedule and work within the budget available. The salary of a PMP professional is around $92,000. 5) CISA CISA is short for Certified Information Systems Auditor. Though CISA was introduced in the late 1970s, it is relevant today also. This certification is basically designed for individuals who want to monitor, assess, audit, and control Information Technology Systems. Once you complete this certification, you would have gained sufficient knowledge to make changes to various policies in order to comply with the latest standards in the market. You will also be in a position to manage any vulnerabilities that occur in the processes. If you have a CISA certification, your salary will be close to $122,000. Therefore, the best way to get recognized at your workplace or to get better job prospects is to select your field of expertise and work hard for the certification. The certification is proof that you are proficient in the concepts of that particular field and can easily handle projects in that area.
Rated 4.5/5 based on 20 customer reviews
5 Certifications That Will Boost Your IT Career

Information Technology has evolved exponentially i... Read More

What You Need To Know To Become a Database Administrator

The job of database administrator is one of the most crucial ones in the chain of IT processes. Since all businesses are data driven, ensuring the integrity and security of the data is indeed a high-priority task that every company is most concerned about.   Database administration is a task that sits right up there in priority list of the businesses. More and more companies are dependent on the data for their policy decisions and business,& therefore they place a high value on people who have the capability of holding up large databases securely. The number of opportunities and the kind of salaries that database administrators can avail is one sure-fire reason to pursue a career in this field. The responsibility of a database administrator is to manage and secure online and offline data, install database software, troubleshoot any issues that arise in the data network. But why does a company needs a database? The answer is simple enough. The existence of database is to provide consistent, easy to access source for all data relevant to that company’s daily operations. More companies are moving their operations online these days and therefore the importance of data is all the more increasing by the day. In the end, the reasonability rests on the shoulders of a database administrator to ensure that the business heads, the engineers or the sales person have access to the right kind of data and on the same lines keeping it safe from the hackers, and other outside elements. Why would one like to become a DBA? There are multiple benefits to a career in database administration. Job security is the first. In the current age, finding a job that can promise you a failsafe future is pretty hard, if not impossible. If we keep the government jobs aside, the private world, which is affected heavily by economic fluctuations, is notorious for offering very less future security. However, with database administration, you can lay to rest all your fears. Data is coming up in a huge way and no company, however big or small can deny the usefulness of data in their operations. Therefore, every medium to large organization is going to be in need of someone who can manage their stores of information.  It is just not an optimistic assumption but a belief based on facts that database administration is a career that is going to stay around in the spotlight for at least a couple of decades more. One cannot ignore the salary advantage that this job offers over other IT jobs. The mean average salary of DBAs is in between $98,000 and $148,500, which is a decent increase over many other jobs in IT. The roles and responsibilities A database administrator administers tests and implements computer databases. He uses his knowledge of database management systems to coordinate any changes to the database and implement security measures for ensuring the integrity of data.  He is in charge of approval and installation of new technology products such as databases and creates the perfect roadmap for integration of different databases so that they work together properly. It is for the database administrator to ensure that there is a hierarchical division of access, so that the sensitive information about a company doesn’t leak on to the executive level. What kind of work environment should you expect? The work environment can vary from company to company. The administrator can choose to work in a wide array of IT roles and placessuch as software companies, healthcare organizations, banks, BPOs, insurance and finance companies and government offices. The normal work routine consists of 40 hours a week working, in rotational shifts. However, sometimes it can extend or reduce depending on the workload. Mostly when the companies decide to move their data from one database to other for security or scaling purpose or when the database maintenance exercise are the times when you have to stretch your normal work timings. IT Skills & Certifications Having a bachelor’s degree in Computer Science, or Computer Information Systems or Database Administration is a good place to start. There is no clear cut definition that distinguishes one database administrator from other; it is more a matter of the type of database management system that one has to work upon which decides the difference.  Those who go through Oracle courses get trained in Oracle 11g that provides database capabilities for Windows, Linux and UNIX operating systems. Oracle Certified Associate certification is a good option for such professionals seeking entry in database administration. Another DBMS is Microsoft SQL Server 2008 which comes in four editions designed to meet the needs of large-scale Data centres and Data warehouses.  MTA Database Fundamentals, MCSA (Microsoft Certified Solutions Associate followed by MCSE is the path that database administrators working on Microsoft Technologies have to take to charter a successful career path. In addition to these professional certifications, every DBA who wants to be on top of their game must have reasonable programming skills. As a DBA, specifically in the development space, having a working knowledge of Java or C# always serves as an advantage while searching for jobs.
Rated 4.0/5 based on 1 customer reviews
1122
What You Need To Know To Become a Database Adminis...

The job of database administrator is one of the mo... Read More

Useful links

5% Discount