It should come as a surprise to absolutely nobody that a lot of startups fail every year. When you begin to break things down by statistics, however, they paint a much more harrowing picture than you probably realized.
According to a study conducted by Forbes, nearly 90% of all startups – or roughly nine out of ten – will fail. That rate is highest during the essential first two years of their life cycle, where only about 66% of all companies will make it across the finish line.
If you extend things another two years, only 44% of those that remain will still be in existence. Things continue similar patterns from there. Finance insurance and real estate, agriculture, construction, information – the industry you’re talking about doesn’t matter.
The good news is that while a lot of startups DO fail, they don’t necessarily HAVE to fail. It’s not destiny – it’s the simple matter that people keep falling into the same key traps and making the same mistakes time and again.
Getting to know and truly understanding the top five reasons why nearly all startups fail today is one of the keys to making sure that you don’t find yourself among this statistic in the future.
In a piece published by Fortune, it was revealed that the number one reason why most startups fail is also perhaps the most simple: they’re making terrific products that nobody actually wants to buy.
In a comprehensive survey, it was revealed that an incredible 42% of startups that failed had not actually identified a market need for their product.
Along the same lines, another one of the major reasons why startups fail is because they’re just not marketing themselves, their products or their services properly. This goes far beyond the startup pitchdeck – from the moment a startup opens its doors, it needs to grab hold of its own internal narrative and broadcast it to the widest possible audience.
Startups should be using a wide range of different materials, like presentations and Infographics, to convey to the world who they are, what they want to do and why they want to do it. Tools like Visme (which I’m the founder of) can be essential during this time, crafting compelling visual content that speaks to the right people in the right ways.
A presentation tool like Visme isn’t just a way to create great collateral – it’s a way for startups to bring their audience into the fold, building anticipation and helping to use the narrative power of storytelling to their advantage.
Another one of the major reasons why startups fail is also a frustratingly simple one: cash flow. In the study reported on by Fortune, this was responsible for approximately 29% of all startup failures – coming in ahead of even things like product timing and pivoting gone bad. Entrepreneurs who feel the need to do it all themselves tend to fall into this trap most often – they become a jack of all trades, master of none. It is imperative that people bring on real experts in terms of cash flow to generate the type of visibility they need to sustain the growth that their startup demands.
Just because you’ve launched what appears to be a successful startup doesn’t mean you’re immune to failure. Any entrepreneur will tell you that failure is a way of life. Avoiding it is not the key to long-term success – recovering from it is. As a result, startups need to be versatile and those who aren’t – those who are unable to recover from minor setbacks by pulling the team together, will often find themselves unable to make it through those tough times. This is something that happens most often to people who are new to the world of startups in particular.
Let’s say that you were able to avoid the trap of releasing a great product or service that nobody actually wanted. If you put something into the world that people are clamoring for, but you ignore what they’re telling you about what it should be, you’re looking at another one of the most common reasons why nearly all startups fail. Startups should not ignore ANYTHING – chief among them being their marketplace.
This often leads to a variety of other issues, from a general lack of focus to a mis-timed product to poor marketing, a lack of passion and beyond.
Marketing collateral is another great way to avoid this trap altogether. Presentations and Infographics aren’t a one-way communications medium – when used properly they can be a great way to open a dialog with a target audience, to illicit feedback and to make sure that you’re always focusing your efforts in the right direction at the right moment.
Despite all of this advice, a huge number of startups are going to continue to fail every year. It’s something that has been true for decades and something that will likely remain true long after we’re all gone.
Even if you’re successfully able to navigate these issues, you still have things like legal challenges, people who refuse to make use of their network or advisors and even good, old-fashioned competition to worry about.
But again: success as a startup is all about what you do when times get tough.
Problems are not a question of “if” but “when,” so the ultimate goal shouldn’t be to put yourself in a position to avoid them altogether.
That’s unrealistic. What you need to do is get ready for them. You need to learn as much about the challenges that you face as possible so that you can plow right through them, coming out in a better position on the other side BECAUSE of them.
Today, a large majority of consumers distrusts advertising, and corporations in general, more than ever before. Today, an average buyer has seen major corporations coax the onset of full-blown financial crisis and spark a major outcry against income inequality. Furthermore, people are bombarded with tons of advertisements every day. Telesian Technology Inc. estimates, that an average consumer sees anywhere between 300 and 700 ads each day. As a result, traditional marketing strategies have become rather ineffective, to say the least.
Two years ago, Serial took podcasting to another level, and while I’m sure you’ve listened to at least a couple podcasts, have you ever considered using a podcast as a marketing tool? And while podcasting is only gaining momentum, many of your potential customers are surely active listeners. In fact, recent Infinite Dial findings have revealed that between 2015 and 2016, podcast listening grew around 23%. And if that’s not enough to make you take podcasting seriously, also think about this – today, more than 20% of Americans, ages 12 and up, listen to podcasts on a regular basis.
And to provide context for what 20% of the country represents, you have to take into consideration that only around 13% of people in the United States have a Spotify subscription, and 21% of them have an active Twitter account. All in all, there are around 57 million podcast listeners in the United States. There are a couple of elements that make podcasting stand out as a great content tool – it gives you an opportunity to connect to your customers, reach a guest audience and it lends itself to generating multiple revenue streams, just to name a few.
According to IBM research, we create around 2.5 quintillion bytes of data every day, as a matter of fact, we create so much of it that around 90% of the data in recorded human history has been created in the last two years. The sheer amount of information we have today has completely changed what it means to be a marketer. Look at it like this – big data is the missing link between marketing actions and results. So, despite all of this, why are so many companies still turned off by big data?
The answer perhaps lies in the fact that there’s a huge emphasis on short-term results in today’s corporate world. And this insistence on instant results can prevent companies from making the necessity investments today to lay the foundation for greater results, which may take months to come to fruition. According to Rex Briggs’ research, around 40% of marketing budgets are being wasted every year by thousands and thousands of companies around the world. A big reason why this continues to happen is because of lack of data that prevents insights, measurements and informed decision making.
And so we come to probably the most underutilized and underestimated marketing tactic of today – email marketing. For years, email has been labeled as a “has-been” in the modern marketing world, taking the back seat to newer and “exciting” tactics, such as social media. But from a pure cost-effectiveness standpoint, it’s hard to argue that something is better than email. What’s more, even though Facebook Messenger and WhatsApp are more commonly used today, people still use emails to communicate quite a lot actually. Radicati Group estimates that around 2.4 million emails are sent every second, which amounts to 74 trillion mails per year.
But seeing how mobile usage has grown in recent years, today you have to approach your email marketing strategy with a mobile-first mindset. Every aspect of your campaign has to be optimized for mobile – fast-loading and visually captivating emails work best on smartphone screens. Moreover, according to statistics compiled by HubSpot, more than 95 of your site’s visitors aren’t ready to buy your product. That is why you should also try to take advantage of email remarketing. Travel companies, for instance, have known how to increase conversions using email remarketing for years. These companies, as well as eCommerce sites that have a high level of booking and cart abandonment use email remarketing as a way to re-engage customers and encourage them to finish the transaction.
Stepping outside of the norm and giving other platforms like podcasting and emailing a chance to work for you and your company will definitely prove equally beneficial in the long run. Leveraging big data will also give you a chance to learn more about your consumer base and allow you to make smarter marketing decisions in the future. Finally, the point is, just because something still isn’t popular or widely-used it doesn’t mean that it isn’t effective. Chances are, some of the more underrated marketing strategies and tools are making someone a lot of money – and if you think outside of the box, that someone could be you in the future.
Nate Vickery is a business consultant and a blogger mostly focused on streamlining marketing and management for small businesses and startups. He is also an editor on Bizzmarkblog.com and a regular contributor on many other business and marketing oriented websites.
We all like to share our photos and filter them in order to get the best possible photo effect. In this article we will concentrate more on business strategy of the most famous photo sharing app in the world and inspect 5 aspects of its success through quotes of Kevin Systrom, CEO and co-founder of Instagram.
“Part of being an entrepreneur is understanding how you’re going to be different.”
Before Instagram, people who wanted to customize their photos needed to use Photoshop. Although it is a great piece of software, is more adapted to professional users. Since Photoshop is a paid software and it can only work from desktop, there were a lot of people who wished to play with their photos, but simply didn’t have the means.
Instagram changed everything, with the introduction of photo filters that are great for photos taken by phone, that often come out too dark, even during a sunny day. Each startup should have at least one thing they do different from others.
“Optimize for people, don’t optimize for valuation.”
Each new Instagram feature was made to be useful for their audience. You can look at their innovation timeline and see for yourself:
Although their app became instantly popular, they waited for three full years to add any sponsored content to it. From this timeline we can see how Instagram adapted its product to make it more suitable for people who like playing with their photos. Imagine 2010 is 2015 and think about what you are doing at the moment to make your startup more optimized for your targeted audience.
“I think that above all else, [what] makes products spread is when they’re useful and they’re usable.”
Unlike other photo sharing apps and websites, Instagram is fully oriented to creating the best possible user experience. On Instagram’s photo pages, there are no commercials and ads and everything is highly transparent. In addition to that Instagram also set a new standard when it comes to fast photo uploading process. All this shows us Instagram’s serious approach to UX which makes it one of the most popular apps in the digital world.
“Bringing a prototype into a pitch meeting is so much more powerful than a bunch of graphs that say you’re going to make lots of money in the future.”
For the moment we will go back to the launch of Instagram. Back then, this app was only available for iPhone users, who were at the time the best audience for app testing. “iPhone People” were always more respectable towards innovations and more diligent in testing all possible features of certain apps. That’s mostly because they are younger and more affluent, plus they invested more money in the gadgets and want them to provide the best possible experience. That’s how Instagram skip the initial talking and put their prototype on the table for everyone to try it. Enthusiasm about this app, which was shared through social network channels by its initial users, put Instagram where it is today.
“You should not be afraid to have simple solutions to simple problems.”
Everybody has that one thing he/she is really good at, and the same goes for startups. When mobile apps introduce too many features, they shift the focus from things they are really good at to those for which they offer average or even above average performance. From the beginning of its work, Instagram focused on photos and filters, and they let other companies to deal with check-ins, video games and stuff like that. Each company has its thing:
This rule doesn’t only concern tech businesses, but any other company that wants to be successful. Do one thing you are good at and have a wide network of people and organizations to provide you with all other services you are not into., You can search for business advice online, the same goes for accounting, graphic design, marketing etc. That is also one of the reasons why outsourcing gives great results for startups, because pros work best with pros.
In 2012, Instagram was a company with almost no revenue, but lots of soul. It was bought by Facebook for $1 billion, which proves our point that making your product more convenient for the users always pays off in the end, and that making over-commercialization leads to small amounts of fast cash, and nothing more than that.
SaaS businesses are lucky enough to have customers that are mostly consistent monthly subscribers. But how do you build that customer base and establish a strong MRR (Monthly Recurring Revenue) to drive your business? In order to grow and maintain profitability, you must provide high quality services and develop a bond of trust with customers.
In today’s time every niche has several businesses working under it, that’s why competition gets tougher by the minute. So if you really want to stand out, it’s important to prioritize trust and establish it as soon as you can.
I’m going to talk about growth hacks that businesses are using these days; they help increase sales and improve your chances of building a sustainable business. These hacks are based on customer satisfaction and user engagement.
You could be a hard-worker regarding your product/service with lots of in-depth research about the industry, but none of it matters unless you pay attention to your customers. This helps make effective business plans and strategies that bring more profit and sustainability.
It’s best to listen to your customers and ask for their advice so you’re able to understand whether their needs are fulfilled or not. This particular technique applies to all kinds of businesses and keeps existing customers loyal and closer to your brand. But the interesting part is that you can promote brand awareness and gain more customers through constructive criticism and product improvement. Before you know it, existing and new customers will turn into brand advocates with positive feedback about your product/service.
That’s why I love Click Desk, they continuously listen to customers through their chat app. Moreover they integrate improvements and additional features based on such feedback. Almost every customer communication tool out there has ClickDesk integration available. It has shown to be user-friendly with Google Analytics, Unbounce, Zendesk and MailChimp; these extensive integrations have been a huge factor in their consistent growth.
SaaS business owners should make sure that their blog is full of relevant content that is up to date. It should be high quality content within your niche and must answer questions that other entrepreneurs are trying to answer. If your blog has sufficient content then you’re sure to inspire others who will share such information within their circle. The more sharing your content generates the wider the potential reach to attract new customers.
Why is blogging important? This isn’t the 90’s where a team of sales reps call a list of phone numbers to pitch a product in order to get a few sales. In today’s time to sell a product, it’s necessary to inspire and encourage people to convert into paying customers. Blogging is the most convenient and viral way to inspire an audience!
The BuzzStream Blog is my personal favorite even though it’s not as popular as Moz.com. An intriguing thing about BuzzStream is that it addresses questions relevant to the industry; this particular attribute makes a targeted audience stick around and eventually become a paying customer. Have a look at the blog yourself!
Speaking from personal experience, UI and UX are very important, almost as important as SaaS tool’s functionality. Ask yourself this: Why would a user stick with your tool if the functionalities of it aren’t working or creating problems from time to time?
The same answer applies to design and user experience. If the functionalities of your tool are superb with a ‘not so good’ UI and UX, users will most likely go for their second choice to fulfill their needs, even if they signed up for a trial account with you.
A few years back I did some consultation for a rank tracking tool called Rank Watch. The tool was perfect at that time but they lacked good user experience on their website and hence were struggling. But today they are well-established and one of the main areas of the business they adjusted was their UI and UX. Once they made strategic tweaks their user base began to grow.
Remember, your customers are the most important people in your business’s life. You should always think of them first. No customer wants an interface to be clumsy or user experience to be painful so try spending the necessary time and energy on UI and UX. Once you provide customers with a seamless user experience, they will stick with you and may possibly promote you online with positive reviews. All the credit goes to an enjoyably smooth user experience you’ve built into your SaaS app.
We all know that it’s important to build a community around your product, but a remarkably small number of SaaS businesses manage to do this successfully. SaaS businesses should especially have an active community around their brand. This can include existing customers and new potential customers. This helps you spread the brand name to a new audience and also encourages potential customers to convert into paying customers. Last but not least; it gives current paid customers a good reason to upgrade. A community shows you care. Sometimes new and existing customers need that warm fuzzy feeling.
Moz.com is one of those few SaaS businesses that get it right when it comes to community! They’ve built a strong community of brand advocates around them and are now a number one marketing tool for almost every type of small business.
I cracked into Moz.com’s community a while ago, read this article to learn more about building and managing a community around your brand.
SaaS businesses aim to retain customers and increase customer base so they can build a profitable business with strong MRR. When talking about this, I think it’s vital to include the massive role that social media plays in customer engagement.
Nobody talks to logos and call centers these days!
Nowadays, people want real human communication with companies and businesses. Facebook, Twitter and Instagram encourages interactions, questions and updates between companies and customers. They provide a platform to approach customers and connect with them every day.
You will surely stay in their minds if your brand name constantly pops up in their news feed or timeline. Never forget to make a presence online! Consistency is the key to staying relevant online.
Here is another example. SEMRush.com runs their social media quite efficiently. Not only do they tweet, but they’re fast to respond and follow up on Twitter chats too. Follow them right now and get a good sense of how to make use of social media for a SaaS company.
Recently I’ve written about gamification and I strongly believe that it’s the secret ingredient to retain customers. If you add gamification within your system then your customers won’t get bored, and are more likely to visit again rather than turning to other alternatives.
Tree House is a great example of adding gamification within systems. It makes users come back again with full motivation where they can share awards and badges with the rest of the world. This helps promote your brand name and encourages potential customers to convert into paying ones!
Where do I add gamification within system? Before coming up with an answer for this, go out there and understand your customers and identify some reasons why they’d come back. Once you’ve concluded these points, you can make decisions.
There’s also gamification for sales teams. All-in-one sales and marketing automation apps like Agile CRM are making it easy and affordable for SaaS startups to gamify sales efforts with leaderboards and email reports. My clients who use CRM for sales gamification often report that they learn a lot about their customers by encouraging competition and collaboration among their sales reps. High-pressure environment demands that sales pros find the hottest leads and learn how to pitch their product to specific user personas.
One step closer? Yes, exactly! The competition is tough. If you are not the first name on your customers’ minds, you probably aren’t the first choice either. The idea is to get one step closer to customers and remind them about your brand name!
Many brands are doing this through multiple means such as conferences, training programs, webinars and more. Even businesses with tight marketing budgets can achieve it.
Get a reliable webinar software and invite the speaker. All you have to do is promote this on as many avenues possible. You don’t need thousands to attend, you can start small!
There are other ideas too, but the one mentioned above is easiest and fastest for small setups too. You can retain customers and spread brand awareness this way, plus in the long run you’ll see increased profitability. SaaS might be a struggle but it’s also immensely fulfilling (and financially rewarding). Connecting with your customers is the first step in building a successful brand!
When it comes to launching a startup company it can be quite daunting to figure out exactly what it is that you want to do when it comes to marketing. With so many overhead costs for advertising, software dashboards and PR distribution costs you are most likely going to have to pick and chose your cash flow battles precisely. Even if you are a hot startup and you just received a check for a cool 20 million from some cushy venture capitalist you are going to need a solid strategy. Throwing everything at the wall only to see what sticks is not strategy.
Here is an infographic from the folks over at Search Enabler which describes the differences between online and offline start up marketing.
We haven’t written about too many startups lately but I would like to dive into this new one that has quickly become one of my favorite branding experiences I have experienced. Dollar Shave Club came out with a YouTube video not that long ago that has quickly grown to almost 4 million views in a relatively short amount of time (I signed up just because the video was that great).
When we preach that your business should have branding & personality this is what we are talking about right here.
I saw this video and had to buy their product. Now I haven’t used it yet but for the few bucks and 5 razors I think it is well worth the experiment. So far the packaging and presentation is great. Many companies don’t realize just how important the packaging really is when it comes to marketing a new product. One thing to keep in mind, these are not selling razors, they are selling a brand the razors just happen to come with it.
There is no doubt about it we are seeing a serious boom in web based start-ups right now and investors along with venture capitalists all around are sitting at the negotiating tables with blank checks and eager smiles. Having a great idea is one thing but making things happen once that idea gets rolling is a whole other story. With so many web based applications, tools and business trinkets making headlines these days there are certain search engine marketing activities that are simply going to be a must have for any new business start-up.
The days of having the build it and they will come attitude are long gone. Today a much more robust plan of attack has to be implemented because not everything goes viral like Facebook. The Foursquare’s and Facebook’s of the world don’t always happen like they expected. Most websites require a swift kick in the keester to get visibility and traction rolling along.
Here are some marketing must haves for new business start-ups:
I don’t care what anyone says you need a well-built and oiled website if you plan on making any impact in your business space. Some of the best start-ups in today’s digital space are consistently evolving their site, functionality and layout as they grow and morph. Phase 1 should be enough to gain some traction but phase 2 should already be in the works before you even go live. With so much technology all around us to make our sites faster, convert better and communicate much easier you have to keep things fresh as you grow. Don’t worry about whether you competition is doing the same because that is irrelevant. Every company has different culture and different goals and you should make sure your website is always improving to keep up with the demand of your web traffic. Step into the shoes of your audience and pretend you are them for just a moment.
I come across new start-up sites every single day. Some are designed and developed to convert well and some clearly have no conversion goals in place. Depending on what your web traffic goals are you have to lead your traffic down a path at all times. These days there are lots of paths to send traffic down. You want to send them to your Twitter account, you want to send them over to your Facebook page, you want a web visitor to find multiple extensions of your brand in order to instill authority and trust and your development needs to showcase this. Create un-cluttered path ways so they can find what they need to help you grow your brand swiftly. It doesn’t matter whether your start-up space is cluttered or you are the only person at the party, a clear concise layout is a happy layout!
No doubt SEO should not be overlooked. Regardless of what your niche or business space is there is always value to conducting SEO for your site even you think there is too much going on your search space. Would I put all my eggs in that basket? I wouldn’t put all my eggs in any basket these days. SEO is a nice foundational step for everything else you are planning on conducting for your start-up. SEO can be tough for a brand new start-up simply because the search results have been peppered with web pages for a very long time and it is often tough to move pages that have been lingering for many years for certain keywords in a short period of time. SEM is like making soup, SEO is the water and being efficient is just the right amount of heat.
Companies which have been growing for many years can sometimes offset a less than stellar social media approach simply because they have conducted business for so long utilizing other facets. A new start-up launching yesterday should is much different and should be conducting more social media than sleeping. Social communication for businesses making their way into the digital space as a start-up now have to be willing to put in the man-hours with a very robust social media marketing strategy.
Social media sources that should be used:
Sure PR and articles are great but viral marketing, unique give aways and creative YouTube channels will create a much stronger impact than your typical efforts. Search engine marketing has no definition or creative guidelines so you are free to roam the lands as you wish. It is a vast digital space and anything is possible in order to attract attention so try to step outside of the norm at some point. With that said though it is important to still execute the basics because the basics are the clue that holds everything together.
Here is a collection of some of the best viral marketing efforts in recent years.