What is the reason that out of many startups, “shoots out” only a few percent? There are many factors, but the main one is human. Organization, advertising, consistency is the key to the success of any business undertaking. But some people think that IT is what pours money on the first lazy request. And this is the first mistake.
The main causes of failures
Everything ingenious is simple, but not everything simple is ingenious. In fact, an IT startup and an already developed IT project is a completely down-to-earth business that simply has its own specifics. We omit examples of knowingly false undertakings, or those that were originally created for further sale. The interesting thing is why real-life projects of ambitious personalities fail. Many well-known experts close to the topic have noticed more than once the same common causes of failure and the main mistakes of startups.
The commercial director of Zoom Market, Andrey Shtyrov, notes that startups are stopped by several factors:
• lack of funding;
• insufficient funding;
• insufficient experience;
• loss of interest in the project.
Roman Kotov, general director of the investment holding Kotov Group LLC, believes that in most cases IT projects fail due to poor preparation before launch.
DATA4 Director Kirill Kosolapov believes that one of the factors is the conflict of founders on the basis of intellectual property issues.
If you try to highlight the most basic reasons, then there are four of them:
• Lack of focus on promotion.
• Poor management.
• Undeveloped team structure, as a result, poor communication.
• Inadequate planning.
For example, there is a service that allows owners of copters and those who need aerial photography to contact. It is called a Pilot Hub. Despite the fact that smooth operation is very important for such a project, it did not use its own API, but the friends API. Naturally, at one point it ceased to be supported, and I had to write my own. This was a clear flaw in planning..
An example of an underdeveloped organization structure is the negative experience of VR Corp. This developer of virtual reality and devices was faced with the fact that the tax mistakenly wrote off 100,000 rubles. The error was recognized, but to return the money you have to go to court. The company was not ready for such a turn of events and admitted that it paid insufficient attention to the issues of its financial and legal security..
Failure is for beginners … or?
It is clear that many start-up projects fail and make common mistakes for startups precisely because of their inexperience and difficulties in entering the market. Andrei Shtyrov, referring to customers of Zoom Market, cites his data: “If we take the statistics, then out of the 100 who applied, only 10-12“ startups ”managed to do something, and out of them only 3 projects paid off, and managed to earn something”.
However, experienced companies may fail..
It would seem that SafeCrow is a fairly experienced service that acts as intermediaries in transactions through the network. Its structure is debugged, management is at its best, and the strategy is thought out. But in some moments you can be sure only by filling up the bumps in practice. The service paid money for advertising MyTarget and Avito, but the result, by and large, was zero. But advertising from Google and Yandex has borne fruit. The difference is that it is more difficult for beginners to survive such mistakes..
Another example is the Examer project, which is an online simulator for preparing for the exam and exam. The service has some experience, but it also had strategic mistakes. For example, management believes that the project should have started with deeper customer development. This would allow us to understand at an early stage why, how and who exactly uses the application, which, ultimately, would make the product much better. The management had the illusion that an ordinary teacher would become an ideal teacher in the process of working on the service. As a result, it turned out that this was not so and the service initially had to carefully select specialists.
How will be correct?
It is difficult to answer this question unequivocally, because the market is changing and startup mistakes have been and will be. However, if you do not allow the four main mistakes described above, you can significantly reduce the risk of failure.
Here’s what Karina Zhdanova from Movavi says about success: “Since 2004, the international company Movavi has been developing convenient multimedia software for use at home and at work. Our company is growing, and there are more products for both Windows and Mac. ”.
As Karina observes, the fate of the company was also seriously affected by external factors: “Movavi Screen Capture Studio was originally developed as a tool for recording Skype calls and video conferencing, this was back in 2012, but several factors influenced the course developments: an increase in the growth of coverage of Internet distribution, an increase in the speed of the Internet and a decrease in its cost worldwide. These two factors have led to an incredible increase in demand for online education and professional webinars since 2015. ” Thanks to her competent approach, Movavi managed to take advantage of this, to understand in which direction the wind was blowing and to take the right step in the development of its product:
“Movavi development team conducted more than 300 interviews with users around the world, and changed the course of product development. So there was Movavi Screen Capture Studio, which users now know. Using the program’s toolkit, you can not only record someone else’s webinar “capturing the screen”, but also create your own video tutorial ”.
As you can see, it is extremely important to catch the trend on time. You will be late – and there is no point in trying, because competitors will be the first. It is also very important to understand correctly who will be interested and useful in the product..
To promote an IT startup? Difficult, but possible!
According to Roman Kotov, there is a fairly simple and, perhaps, the only algorithm that allows you to succeed and avoid the mistakes of startups that are often made by many novice entrepreneurs:
• Make a minimum work product.
• Run ads.
• Select a working at least 1 advertising channel.
• Sell your service / product manually.
• Gather customer feedback and start improving.
• Work with this advertising channel before reaching a stable profit..
• In parallel, test other advertising channels and find other working solutions.
Of course, you must first make appropriate market research.
“The essence of any business project is the satisfaction of the needs and demands of customers and users. Before starting the development of any product, it is necessary to conduct surveys, preliminary sales, tests and see if there really is a demand for what you are going to develop, for your service, platform, aggregator. If you have checked and made sure that the demand and need for your online service exists and most importantly, that people are willing to pay for it, then it remains to act according to a simple but proven algorithm, ”says Roman.
However, many do so. Andrey Shtyrov comments: “Over the past 5-7 years,“ startups ”have often come to us for preliminary marketing research. Most of them represent IT startups. Most often, research should solve two problems arising from one: is there a demand for it? Will they buy (use)? When confirming the hypothesis, the “startup” goes with our research to the bank to obtain a loan or to attract investors ”.
However, some give this information the status of the ultimate truth, and this is fundamentally wrong. The market is changing, and you need to be prepared to change your product according to its trends, as BashNaBash did, introducing bonuses and cashback, as well as many other successful IT projects.
In general, IT projects can have very different problems, as evidenced by the words of Kirill Kosolapov:
• Novice entrepreneurs do poorly conduct problem interviews and solve a client’s nonexistent pain (this is the reason for failure in 90% of cases).
• Attract a “bad” investor (Rambler lost to Yandex, including because the investor was the initiator of a frequent change in the company’s business model and actively intervened in management).
• Technological unavailability of the market (Apple launched the Newton PDA in 1993, but the level of communication, Internet and technology did not allow it to conquer the market, but the market was already ready for the IPhone).
There are some really annoying mistakes made by startups when they do not “take off” simply because people do not pay enough attention to advertising, although the quality of the project and the team work are up to standard. According to Oleg Dronov from the AD.ru investment fund, this is a characteristic feature of Russian developers and one of the most common reasons for their failure, along with focus solely on the country’s domestic market:
“You cannot create a successful product, relying on your own thoughts, everything needs to be checked on sales. I looked at more than 3,000 startups, and only 20% of them are seriously involved in customer development. In my opinion, there is no need to be afraid to experiment: it’s better to release a raw product, watch how the audience reacts and refine it in the process ”.
In conclusion, it is worth noting that a competent approach to an IT project does not guarantee its success. No matter how relevant the idea may seem, the audience may simply not be ready for it. It is important to pay attention to all aspects of the creation and promotion of the project, but this is, in any case, a risk.
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