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  • Writer's pictureAndy Hamer

Delusion of Marketing Magic: Why Tech Founders Need to Wake Up and Embrace successful processes

Introduction

Last week, I came across a post from one of my former colleagues about the frustrations of being responsible for the head of growth in a tech business. They highlighted the common belief among founders in the magic of marketing to grow their business and how they are lured into this mindset by the increasing number of people selling "marketing hacks" and "wins." Another post by Justin Kan discussed how founders are often obsessed with products in their initial stages and then distribution in the later stages.

The comments on both these posts demonstrate a lack of understanding about the leading causes of tech business failures and the right way to grow a business, as there are many wrong ways.

That's why I am publishing this article on the importance of eliminating magic and luck and relying on trusted processes to maximize the chances of success.

Starting a technology startup has always been a risky venture. With 90% of them failing within the first few years, entrepreneurs face an uphill battle. However, the reasons for failure are well-documented, and it is possible to avoid them with the right strategies. This article will explore why 90% of technology startups fail and how they can be avoided. We will also explore some best practices for improving the startup failure rate.


Why do 90% of technology startups fail?

The reasons for failure are varied and complex. However, some of the most common reasons for failure include:


  1. Bad idea with no market


One of the most common reasons for startup failure is launching a product that does not have a market. This can happen when an entrepreneur falls in love with their idea and assumes that there is a market for it. However, without proper market research, the entrepreneur may waste resources on an idea that does not have a customer base.


  • Poor product-customer-market fit


Even if a startup has a good idea, they may only succeed if they have a product that fits the needs of their target customers. This can happen when a startup does not understand its target customers' pain points and does not tailor their product to meet those needs.


  • Poor Go-to-market strategy


Even if a startup has a great product, they may only succeed if they have a good Go-to-market strategy. This can happen when a startup does not understand their target customers' buying habits or has no clear plan for reaching them.


  • Running out of money


Finally, a startup may only succeed if they run out of money. This can happen when a startup underestimates the amount of funding they need or does not manage their cash flow properly.

How can startup failure be avoided?

Entrepreneurs need to adopt a common-sense, no-nonsense approach to avoid startup failure. This approach should map out the critical actions that must be completed from ideation to commercialization.

That's why I've created a process to take an idea and commercialize it using my 10-stage process:

Gorilla Team Associates 2023

Some of the best practices for avoiding startup failure include:


  1. Conducting thorough market research


To avoid launching a product that does not have a market, startups need to conduct thorough market research. This research should include an analysis of competitors, market trends, and customer needs. Startups should also gather feedback from potential customers to validate their idea before investing significant resources.


  1. Building a product that fits customer needs


To avoid launching a product that does not fit customer needs, startups need to understand their target customer's pain points and tailor their product to meet those needs. This may involve conducting user testing to gather feedback on the product and iterating on the design until it meets customer needs.


  1. Developing a clear Go-to-market strategy


To avoid launching a product without a clear plan for reaching customers, startups must develop a clear Go-to-market strategy. This strategy should include understanding the target customers' buying habits, a plan for reaching those customers, and a budget for marketing and advertising.


  1. Managing cash flow effectively


To avoid running out of money, startups must manage their cash flow effectively. This may involve creating a budget, forecasting cash flow, and monitoring expenses closely. Startups should also explore funding options, such as angel investors or venture capitalists, to ensure they can access capital when needed.

Best practices for improving the startup failure rate

In addition to the above strategies for avoiding startup failure, there are several best practices for strengthening the startup failure rate. These include:


  • Fostering a culture of experimentation


To increase the chances of success, startups should foster a culture of experimentation. This may involve encouraging employees to take risks, testing new ideas frequently, and learning from failure. By embracing experimentation, startups can identify what works and what doesn't


  • Building a strong team


Building a strong team is crucial for startup success. Entrepreneurs should hire employees with the right skills and expertise to help the startup succeed. They should also prioritize creating a positive work environment and fostering teamwork to ensure everyone is working towards a common goal.


  • Seeking advice and mentorship


Entrepreneurs should seek advice and mentorship from experienced professionals in the industry. This can help them avoid common pitfalls and provide guidance on best practices for startup success. Mentors can also help entrepreneurs build valuable connections and provide support during challenging times.


  • Embracing technology


Finally, startups should embrace technology to streamline their operations and improve their products or services. This may involve leveraging tools and platforms for customer relationship management, project management, and marketing automation. Startups should also stay up-to-date on emerging technologies and explore opportunities to incorporate them into their business.

Conclusion

Starting a technology startup is challenging, and the odds of success are not in the entrepreneur's favour. However, entrepreneurs can increase their chances of success by adopting a common-sense, no-nonsense approach and following best practices for avoiding startup failure. Conducting thorough market research, building a product that fits customer needs, developing a clear Go-to-market strategy, managing cash flow effectively, fostering a culture of experimentation, building a strong team, seeking advice and mentorship, establishing a strong brand identity, and embracing technology are all critical strategies for improving the startup failure rate. By prioritizing these strategies, entrepreneurs can create a strong foundation for their startup and increase their chances of long-term success.


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