As we slowly recover from the pandemic and begin life anew, entrepreneurship and startup life is no longer the obscure path it used to be. With the ease of starting a new business and new ways of working, startups are mushrooming everywhere and fighting for their chance in the limelight.
While we hear often that startups fail often, this rarely becomes a deterrent for would-be startup founders and their dream of creating the next unicorn business. According to CB Insights, 42% of startups fail because they can’t find a market need. Simply put, their startup idea is pointless.
The best way to build a sustainable business is by providing a solution with demand. By giving the world a solution they desperately need for their problem, a steady growth of userbase and profits can be expected. Without it, the startup is doomed to fail.
What are some ways startup founders find themselves in pointless startups? That’s the question we want to answer today.
Creating a Problem
Without proper research and customer insight, it’s easy for a startup to develop tools and solutions for a perceived problem. These founders tend to assume either a current need or a possible need of their target audience, hoping they’ll meet their customers at the point where the problems start to arise. A lot of the time, the solution comes too early, doesn’t provide sufficient value or is a nice-to-have rather than a need. Without the urgency, the startup becomes pointless and won’t be able to grow or sustain itself.
Copying a Similar Business Model
There are founders that see another startup doing something innovative like building a social network successfully and feel they can do the same too with a different market segment or niche. Simply replicating a business model without understanding how or why it works and doing proper customer interviews beforehand could mean the early demise of your startup.
Admiring successful business is one thing but looking at them and envisioning your startup to reach that scale quickly is naïve for a startup founder. Every successful startup began as a small business. If your idea requires a distribution model or scale of manpower of the likes of Amazon to succeed, it’s highly unlikely that you can make it there before running out of funding and that’s assuming you can get the funds to roll-out your plan to begin with.
Building a Business That Last
The only sure way to build a business that last will be through proper research. Find out what the real pain points are and how badly those pain points are affecting your target audience. You can find that out fairly easily through customer interviews and conversations. Nurture the relationships you have and build solutions that solve real problems. When you can create a tool that saves time, effort or the sanity of your users, you’ve got a successful business in your hands.
Not sure where to start? There are many different frameworks you can try out when working on the problem statement. Our personal favorite at Mad Creative Beanstalk is the Lean Model Canvas. Take a look at our post on how to use it and download the canvas here for free.