07/04/2015
A feasible business idea. Check. A solid product. Check. But does that guarantee success? Here’s what not to do if you want a chance at successResearch by Harvard Business School shows 75 per cent of startups fail. There are no perfect business plans. In a dynamic market as today’s, it is rather difficult to stick to a prescriptive approach guaranteeing success. However, there are some mistakes that should be avoided during the initial startup phase:Premature scaling A recent report by Forbes concluded that premature scaling is the most prominent factor that leads to failure in startups. Premature scaling can include a wide array of reasons such as expensive marketing / customer acquisition cost, leasing new offices / expanding to new territories and hiring too quickly, just to name a few. The biggest mistake young firms make (in their ambition to grow big) is to try scaling before product-market fit is achieved.The truth is in fact that it takes two or three times longer than founders assume for most businesses to be really ready for scale. The wisest thing to do is to preserve resources and spend judiciously than have sunk costs.Inferior locationA good location (city / area within a city) can potentially be a key factor for business success. Often, young startups make location decisions based on cost. However, many times, talent can be scarce to find in these locations. The reality is that the indirect cost of not finding the right talent quickly can be much higher than the direct cost savings in an inferior location. Startups should survey the availability of talent in a particular location before finalising on one.Also Read: Echelon TOP100: PepperTalk and Weddingplz …
