6 Feb 2016, 12:44 — 4 min read
Startups are inherently fraught with a lot of risk. Building a new business from the ground up, selling a new product or business idea to clients and customers and earning a reputation for yourself is an extremely challenging task, one in which you risk failure at every step. Your startup ideas can only carry you so far.
It is thus important to learn from the mistakes of others so you don’t fall into the same traps that brought down thousands of other startups. We’ve compiled a list of the essential startup lessons every entrepreneur should learn before they venture into the unknown!
Lesson 1: Get the Data
In order to get a precise idea about who is and who isn’t using your products, you need data. Lots and lots of data, actually. If you don’t, you’re doing nothing more than shooting in the dark and praying that you hit the target. With the help of a comprehensive stack of analytical tools and key performance indicators (KPIs), you can create a clear picture of what’s working, what isn’t and what you need to do to fix it.
Lesson 2: Money Talks
A startup that relies solely on the number of non-paying users or site visitors cannot be sustainable over a long period. A successful business model is ultimately based on how you actually generate income now, in the present; not two years down the line. You may receive VC funding, but your business model should be built on the premise that you won’t; that way, you’re prepared for the worst. Even if you don’t get the funding, you have a business that provides you a steady stream of revenue every month.
Providing users with free services is a good way to lure them in, but if you want to generate money, at some point you will have to charge them for it. And if your product improves the user’s life and makes him/her happy, he/she will be willing to pay for it.
Lesson 3: Grow Creatively
Startups face an uphill battle in the beginning – they have to compete with established players, often in a crowded marketplace. Being creative, trying out new experiments and constantly innovating is the only way you can come out on top.
The most important value you can instill in your startup is growth oriented creativity. Every member of your team should be trying to concoct creative methods to grow the startup. Innovation should be a part of your startup’s DNA; it is incredibly essential to attain success.
Lesson 4: Value Retention
Most of the time, startups are focused solely on acquiring new customers and scaling their operations for the mass market. As a result, a ton of money is diverted to marketing and publicity in the hope that by creating hype, new customers will come.
While acquisition is definitely important, so is retention. Trying to scale your business without valuing your existing customers will leave you in a lurch; even the new customers will eventually slip from your fingers. Study, analyse and understand what makes your existing customers return to you. This will provide you with invaluable insight into what you must do once you acquire new customers to make them stay.
Lesson 5: Always Focus on Customer Support
No matter how small a company you are, no matter how few customers you have, putting the customer first is always a winning strategy. In fact, it can be a massive differentiator for your startup if you make a name for yourself as the company that values its customers, readily accepts feedback and pro-actively improves its performance. Stellar customer service can set you apart in the market and help you build a reputation for yourself.
What other lessons do you feel startup founders should learn? Share your thoughts with us in the comments below!
Posted byAnjan Purandare
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