What are the common myths about startups keeping you back? Popular culture and tech blogs have created quite a few misconceptions about what it takes to run a successful start-up. Worries about getting enough funding or misallocation of resources can stop a promising startup before it really starts up. Here are a few of the most common myths that can keep potential founders from being successful or from getting started in the first place.
“A quality product is enough”
Good tech and a novel idea are both important components to a successful startup, but business savvy is equally essential. Your product could be the best on the market at what it does, but that only means something if you have quality people in marketing, sales, support and other areas of the business. The processes for creating marketing and support strategies take time just like perfecting the tech does, so getting those areas moving early will keep your startup running on schedule. By hiring quality people in all areas of the business early on you can demonstrate professionalism to not only potential customers but potential investors as well. Don’t forget to make sure you’re measuring these engagements.
“People are looking for a new way of doing things”
Startups are meant to use innovations to solve a problem or make a task easier. It’s easy to fall into the trap of thinking that since your way is better, people will automatically jump on board. Humans are creatures of habit and it can take a little bit of convincing to switch them over from their old way of doing things. This means savvy marketing is very important. Even in cases where it looks like a product achieved overnight success, there was often a marketing strategy involved. This is especially true of programs that target audiences outside traditionally “early adopter” communities. Techy people are often willing to take a chance on a new app, but a large segment of your potential user base may be less savvy. Be clear in your outreach about why it’s worthwhile for them to learn a new interface and take up more precious space on their phone or computer.
“Free is Key”
It’s true that everyone likes free stuff, but they don’t necessarily value free stuff. If you let users access your product for free, they will likely jump on the bandwagon of the next big thing at the first chance they get. You then lose these fair-weather users to other apps, and also miss out on the revenue that a charge-to-download app generates. You can get stuck paying to keep the app running until advertising or other revenue streams catch up, while users lose interest and move on. By charging for your app you give users an incentive to stay loyal to your brand while recouping some of your financial losses right off the bat. The trick here is marketing your product as being of high enough quality to warrant the price. When potential users see an app that costs money, they often assume it is better than the free competition. You and your marketing team have the job of convincing those people that they need that higher quality experience.
“VC is Key”
Starting a tech company, or any company for that matter, is easier when there is a large initial investment. This can make finding an angel investor look attractive or even essential. But, there is a serious downside to receiving large amounts of funding early on. When an outside person or group has a large investment in your project, they often expect a lot of say in how things are run. This can move the company in a direction that diverges from your original vision and can end up leaving everyone involved frustrated. By “bootstrapping,” using your own money to get started, you can retain full control over your vision. This is not to say that you shouldn’t explore possible funding opportunities! A start-up can use all the help it can get. Just don’t get discouraged simply because billionaires aren’t throwing money at you. As your start-up gains momentum, there will be opportunities down the line for partnerships and investors.
“Stick to the Plan”
There is an old Yiddish proverb that says “Man Plans and God Laughs”. You can plan as much as you want but outside factors are always going to force you to adjust. That isn’t to say you shouldn’t draft a business plan. It’s essential for giving potential partners and investors an idea of what your goals are. Write out your detailed best case scenario, but as you go along, be constantly adjusting. If you are too precious with your original plan, you will lose out on opportunities to grow and meet market demand. This applies to financial projections as well as growth goals and design. Tastes change and trends push the market in directions you can’t always predict. By leaving some flexibility in your plan, you give yourself the opportunity to adjust your model as new challenges and opportunities arise.
Guest post by Sarah Hurd.