Summary of eight reasons for entrepreneurial failure

The word entrepreneurship seems to be a bit costly, costly, and seems to be very bitter, but there are still a lot of entrepreneurs. The following is a summary of the eight reasons why I have collected and organized the failure of entrepreneurship, for your reference and reference, I hope to help friends in need.

Summary of the eight reasons for entrepreneurial failure:

In this society of severe employment, entrepreneurship has become a new way out for many people. However, in this entrepreneurial road, not everyone can go to the end, not everyone can be successful, the failure of countless people. The same is entrepreneurship, why will someone finally succeed, while some people fail? Below, summarizes the eight reasons why entrepreneurs fail.

One of the reasons for entrepreneurial failure: focus on the surface phenomenon, do not focus on analysis.

Entrepreneurs are often through the investment documents to determine the feasibility of the project, to determine the future prospects of the project, but ignored the market research. Whether a project is good, the main thing to look at is whether there is a demand, if there is no consumer demand, and then the good product is also a castle in the air, look good not to use.

Entrepreneurial failure reason two: to price to determine whether consumers can accept.

On the surface the price of the product is indeed the key to influence consumption, which is a very common low price strategy. In fact, the price is only a factor, and can not represent the attitude of consumers. The main price of the product or to see how much benefit to consumers, can give consumers what kind of happiness, if a product is a consumer like willing to accept, the price is not a problem, if consumers do not look at the product, the price is the main factor. The successful businessman will guide the consumer, the price is never the main.

The third reason for business failure: self-confidence is the key to success, but also the reason for failure.

Self-confidence is a necessary quality of entrepreneurship, without self-confidence, do anything will be hesitant to do, before the fear of wolves and tigers. And why is the reason for entrepreneurial failure? Self-confidence is a kind of confidence, rather than blind self-righteousness, entrepreneurship is a self-corrective process, people are not perfect, there will be such and such a problem, which is not surprising, it is important to be able to find their own shortcomings at any time, at any time to amend the route of entrepreneurship, if you don't have these, self-confidence, and what is the use of it?

The fourth reason for entrepreneurial failure: there is no clear business direction.

Some agents when they realize that this is a good product, immediately decided to do the agent, immediately order, I think this is the good side, entrepreneurial opportunities will not wait for people, especially regional agents, when the region has an agent, the next one will have no chance. After the agent, but can not decide where to start, should first attack that piece of the market, there is no clear business direction, it is like a blind man hitting the target, the probability of success is how high?

Entrepreneurial failure reason five: no strict implementation, do not pay attention to efficiency.

Energizer King market manufacturers do not have any marketing programs, taking into account the entrepreneurs are generally new, so I am in the process of exchanges with the agents, to understand that newcomers often do not have the ability to open up the market, the need to give guidance and help, on the development of a program of operation, and a small range of market operation test, the effect is very good. When this operation program to the agents, they often discount in the implementation of the time, not strictly in accordance with the program to operate. Even delayed to operate the market, to open up the market, resulting in low operating efficiency.

Sixth reason for business failure: lack of learning ability.

A lot of entrepreneurs themselves do not have the ability to learn, in fact, learning is not the same as is the level of knowledge, knowledge of people is not necessarily a person who will learn. People who are good at learning, can learn from others to learn some business knowledge, no matter what people have for business knowledge how secret, as long as there are articles can see some of the other people's business strategy, the purpose of learning is here.

Seventh reason for business failure: lack of expertise.

Professional competence seems really difficult, and not the average person can learn and form the ability in a short period of time. And professional knowledge needs to learn and hands-on organic combination, in fact, is not difficult, learning and doing, to form a professional ability is not impossible to do, so entrepreneurship is tough on this.

Entrepreneurial failure reason eight: do not know how to market themselves.

Businessman marketing is not the product, but in marketing themselves, a person who does not know how to market themselves, the chance of success is not much. People who are used to saying how good the product is, the product will never sell. Marketing yourself is how much good you can give to others, how much joy you can give to others, and the people who can give others joy are the ones who are likely to succeed.

Summary of why businesses fail:

Labit was a website that helped researchers create web pages for their labs. Today this site no longer exists.On December 5, 2017, we shut down our servers. Our website no longer exists. Shutting down your startup feels a bit like losing someone you love. Here are the mistakes I made and the hard lessons I learned over the course of my time as founder and CEO of Labit.

Mistake #1: Failing to choose the right co-founder

Shortly after we started our startup, we brought on a third person as our co-founder. He was a very smart person and a very good scientist, but his emotional intelligence was very low. In many situations, he came across as very emotional and took a long time to calm down. I think I can live with his low emotional intelligence because of his intelligence.

But it turned out that I was wrong. He didn't do well on the few tasks I assigned him. We set up a meeting specifically to discuss this, but as soon as we started, he got angry, stood up, slammed the door and left. Right then and there, it was all over. We both knew we couldn't work with him. The man was immature, didn't admit his mistakes, and couldn't take constructive criticism. He would snap under the slightest bit of stress, and stress is a constant in the development of a startup. He would damage all of the company's business in a critical situation, and I couldn't let that happen, there were still a lot of people counting on me to lead this company to success, and I had to let him go. I lost a friend, but I saved a company. At least for a while.

Mistake #2: Failing to innovate from 0 to 1

It's highly recommended to read Peter Thiel's book Zero to One. The core idea conveyed in this book is really quite simple. All great companies innovate vertically rather than horizontally. They move from one level to another.

That's where we ourselves failed. We want to be the Facebook of the research lab space. there are also many opportunities and examples on the market to clone a successful company, such as Uber in the pet world, Facebook for kids, Airbnb in the parking space. first of all, when you do a Pitch for your project along these lines, it sounds like a copycat of a cottage industry, which is very bad. Second, if your company doesn't innovate from 0 to 1, the chances of your company growing into something great are very slim, even if your company's execution is excellent. Which is more important, the idea or the execution? The answer is: both.

Mistake #3: Not choosing the right target audience

When we were choosing our target audience, we were faced with a few options: B2C (consumer-facing business), B2B (business-facing business), and B2A (business-facing academic business), and in the end, we chose B2A, which was the worst of the bunch. .

Thinking about academia in terms of innovation is very counter-intuitive. An outside observer might think that scientists are innovators because scientists are the ones at the forefront of technology and innovation. Isn't that right?

Not true!

People in academia are actually very reluctant. Researchers bury their heads in researchables and can't see anything around them. Most management positions with decision-making power are held by people who are old-school and conservative. They're happy with the current system, and they don't care if they can make it more efficient by providing some kind of technology.

We are scientists ourselves, so we are driven by noble intentions, and that intention is to contribute to our society. But we fail to recognize the obvious lag and inertia that exists in academia, and we pay a heavy price for it.

Make sure you are starting in the right place.

Choosing to start a company can already be a reason to question your sanity. The sheer insanity of choosing to start a business in Korea as a foreigner. Culture and language can determine a lot of things. I was surprised to realize that there are so many people who are different from me living on the same planet as me. Are Koreans aliens? Or should I say, are we aliens? They experience company in a . . way is baffling. The pointless bureaucracy and rules are very torturous. Korean academic culture is an entirely different story and deserves a separate analysis of it. The struggle is real.

Location is crucial. Living in Gwangju, 268 kilometers from Seoul, isolated us from both the startup scene and potential connections that Seoul has to offer.

If we were starting a company in the US, or in any English-speaking country, there are a lot of things we could do right. Of course, the situations I've encountered may not be the same as the ones you've encountered in your startup, but I want to emphasize the importance of starting a business in the right environment. You can choose Silicon Valley or any of the major tech startup centers in the world. Starting a business in a small city away from the business world will make you do a double take.

Mistake #4: Not adequately validating the startup idea in a timely manner

This is where we went wrong when we first started. The mistake I made in this area is one of the most common mistakes in entrepreneurship: I over-idealized objective reality.

I thought to myself that this pain point that users were experiencing was much more painful than it actually was. In fact, it was more of an inconvenience than a problem. But I convinced myself and others that the scientific community needed us to provide a solution. I was driven by a vision that ultimately took me to the wrong place.

Make sure the problem you're trying to solve is a real pain point that users are experiencing, not just a simple inconvenience. Don't get caught up in the zone of what you want to believe. Thoroughly validate that your startup idea is viable. We recommend reading Eric Ries' book The Lean Startup.

Research studies can give you some information, but for the most part, they are not very valuable. They don't represent the real situation.

Please do real interviews with your users. Don't try to sell, and by sell I mean here don't try to impose an opinion on your users. Present your product and ideas objectively to your users and then watch their reactions.

When you talk about your ideas, be objective. See how people will react and ask how they will use the product. Will they buy the product? If they will buy it, how much are they willing to pay for the product?

The only guiding principle for this step is the motto of Y-combinator, the world's leading startup incubator: develop products that people actually want.

What Y Combinator means by this is that you should make sure you can find potential customers and successfully sell your startup idea before you even develop a product or write the first line of code.

Make sure you can find people who are willing to pay for your product. Or in the words of Brian Chesky, CEO of Airbnb: It's much better to have 100 people who really love your product than 1 million people who love your product.

Mistake #5: Not getting the product out quickly

And so, we developed the MVP. my team developed the initial version of the product in less than 2 months, and this version was Ok. I should have released the product right then and there. But I waited too long. If I could go back in time, I would tell myself: just get the product out quickly!

I spent a lot of money redesigning the product, including the logo design, and developing some additional features. I wanted the first users to feel that the product was perfect. It took us months to upgrade from alpha to beta, but the alpha version was almost ready to be released, and the beta version looked better, but it was unnecessary to spend months on it. I wasted a lot of time polishing a product we weren't sure people would want.

This mistake is one of the most common mistakes founders make. Founders are very hesitant to release a product. They always try to iterate on a product that hasn't been released yet. In reality, the goal at this stage is to release the product and start learning from real user feedback. It's acceptable for the first version of the product to be ugly, flawed, and incomplete. Bring your ugly "baby" into the world and let it evolve.

Mistake #6: Not raising enough money for growth

One of the most important roles of a company's CEO is to make sure the company has money. In fact, in the initial stages of a company's growth, this is arguably the only job of a company's CEO.

Make sure there is always money in the company's bank account. I was raising some money from the Korean government. There were serious limitations in the way we used that money, but we managed to develop the MVP, successfully design the product logo and interface, and invested a little bit in marketing and company registration. There's another reason why founders shouldn't care about competition. As Paul Graham, the godfather of entrepreneurship, said: the most common reason for startup failure is not from competition, but suicide.

Companies that run out of money inevitably die.

Mistake #7: Failing to put together a solid team

In addition to raising capital, the second most important job of a startup's CEO is hiring. Every CEO I've met says that recruiting the right people for the team is one of the most difficult tasks. First, I was guilty of finding co-founders, and then I was guilty of recruiting team members.

We met someone who was a great programmer and database engineer. He was an absolute expert in his field and I made another mistake in hiring this person. For a non-technical co-founder like me, his level of expertise is daunting. I was confident that he would eventually be able to solve some of the problems we were having with spending too much on freelancers. So I started paying him a very small amount of money to help supervise the two freelancers we hired. But they didn't need supervision. They did a great job, so the guy ended up doing no work at all, but still got money back from it. If he would have learned the framework of this product like he promised, that would have been a problem too. But he didn't do anything. He's one of those classic all talk, no action kind of masters. I made the same mistake twice.

One of my own problems is that I always see people as more powerful than they actually are. I believe people can change. But a lot of times, they prove me wrong. This guy is a real mess. After falling in love with a Korean girl, he overnight he went from a lifelong atheist (and a scientist) to a superstitious person, and they got married after two months of dating.

This man's life as a follower is something that would have been irrelevant to the topic I'm discussing in this post, if the fact of his pathetic professionalism and lack of integrity hadn't jeopardized our company and team. What I'm trying to say here is this: always be careful when it comes to recruiting.

Even if your potential hire is a great engineer, if he doesn't have integrity, he will let you down.

If your team members are only working for money, they lack the same motivation as you you do. As soon as there is a problem in the company, they will leave immediately.

The initial group of employees a company hires is just as important as the founders themselves. They will define the DNA of the company, and the company's future hires will be based on that first group of employees. If you don't recruit the right first employees, you will suffer the negative consequences of this problem throughout your startup career.

The best book I've read on this topic is Hello, Startup by Yevgeniy Brikman. Chapter 11 of this book is dedicated to hiring and is the best part of the book, which is very valuable and recommended reading.

Of course there are very suitable people. It's hard to find decent people with skills. But sometimes you find real diamonds in the rough. The salaried freelancers who initially worked for us eventually agreed to officially join our team, believing that this startup idea of ours had the potential to grow into a big business, so they joined us even if they had to make salary sacrifices. These guys were simply awesome. I've never met them in person and haven't done a lot of networking online, but their professionalism and integrity never made me doubt them.

There's an unspoken rule that all of us follow: one person does the talking, one person does the doing. I believe this is the only right way to do things. Developers always execute on time to complete the required tasks, they are very efficient and responsible. Here's another rule for startup teams to follow: insist on hiring the right people.

Mistake #8: Working multiple jobs

If you have a full-time job, this is the point where it's extremely difficult to start a startup if you're trying to work at the same time. At the end of the day, you're already tired from your day job, and you naturally want to get some rest after work. Everyone's energy is limited, and everyone only has 24 hours in a day. If you're multi-tasking, working full-time and starting a business at the same time, something is definitely going to suffer.

Is there a worse situation than starting a business while working full-time? There is, and that's starting a business while pursuing a graduate degree.

When you're a master's student or a PhD student, you don't have a life of your own anymore. If you try to start a business while pursuing a graduate degree, your life becomes a living hell. Here's some advice for any student who is considering starting a business and planning to drop out of school:

Don't start a business while going to school, don't drop out of school to start a business, finish your degree first, I'm serious. Get your degree and get this thing done. It doesn't matter what you do after you graduate, when you get a job interview, the interviewer is going to put a lot of emphasis on how well you have a degree on your resume. Having a degree will open a lot of doors and opportunities for you. Starting a business can wait. Academics can't be wasted.

Well, if you don't take my advice. Still choose to start a business while working, or while going to school. Then welcome to hell, this post talks about some of the things you must know in the early stages of your startup.

Mistake #9: Failing to manage your company's overhead

There are a few things to keep in mind:

(1) Don't get too busy registering your company right away. There is a very famous service called Stripe Atlas. You only need to spend $500 and it will help you with the incorporation side of the business and it is very fast. So don't get busy registering your company in the beginning. At the initial stage, you don't need to register your company. Only go for incorporation after your company is generating revenue or after you have found investors and they need you to incorporate your company. If incorporating, it is better to incorporate in Delaware. There's no need to get creative with this, just go with the flow, and Stripe Atlas will automatically open a bank account for your company at Silicon Valley Bank for a separate fee.

(2) Bank account maintenance overhead. Silicon Valley Bank will charge you $25 per month for maintenance. In the early days, it was an unnecessary expense.

(3) Server overhead. Even at the lowest fee cost to maintain your site, you're looking at roughly $20 a month. Make sure you have enough money to cover your server expenses.

(4) Payroll overhead. If you can, it's best to not pay your employees. Find people who share your **** vision and dreams, people who are willing to work to achieve the company's goals and get a certain amount of company shares. Don't be too stingy when it comes to distributing company shares. When it comes to splitting shares, be very generous to those who have helped you build your business empire.

If your company is worth nothing, even if you own 100% of the company, then you are worth nothing. If your company is worth a billion dollars, even if you own 10% of the company, that's a lot of money.

Mistake #10: Not Preparing Your Business for Failure

I myself wasn't prepared for failure at the time. I thought I was ready at the time, but I actually wasn't. I had invested too much in this venture and it's a terrible feeling to watch your startup boat about to sink.

On average, 9 out of 10 startups will eventually fail. This is a fact that the folks at Y Combinator have always believed. I believe this statistic is very close to the truth. Running a startup is extremely difficult, and finding the right direction from the start is almost impossible to do.

Elon Musk once said, "To start a business is to chew glass and stare into the abyss."

Thanks to Musk, who very graphically expressed what it's really like to be an entrepreneur now.

Disclaimer: This article originated from TAC Accelerator is for reference only and does not represent the views of this platform, if there is any infringement, please inform contact to delete.

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