Starting a new business is an exciting but challenging endeavor. With over 21 years of experience in global performance-driven impactful and innovative marketing leadership while working with F500, Enterprises, Mid-size, and Startups, I've seen firsthand what makes or breaks a new business, new product, and startup. Despite the passion and innovation that fuels startups, many startups face significant hurdles that lead to failure. This blog explores why startups fail based on my research over the last 10 years of various startup failures and provides 21 tested, proven, and innovative marketing strategies for startups to help them succeed.
What is a Startup?
A startup is a newly established business, typically in its early stages, aiming to develop a unique product or service and bring it to market. These ventures are often characterized by innovation, scalability, and high growth potential.
What is an IT Startup?
An IT startup specifically focuses on technology and digital solutions. These companies develop software, hardware, or digital services designed to solve problems or improve existing processes. They thrive on technological advancements and require substantial technical expertise.
Why Startups Fail
According to a report by CBInsights, the top reasons startups fail include:
Receiving Feedback from Customers (Download ‘Customer Feedback Survey’ Template)
Establishing Brand Awareness
Broadening Reach
Creating Product Leadership with Innovative Strategies
Delivering the Product to Customers with the Right Storytelling
21 Rocking Market Strategies for Startups, New Businesses, and New Products
1. Understand Market Size (TAM, SAM, SOM):
Example: Airbnb used TAM, SAM, and SOM analysis to identify a massive global market for short-term rentals, refining their focus to the most profitable segments.
2. Understand Customers and Their Pains:
Example: Dropbox conducted early user research to understand the pain points of file storage, leading to a product seamlessly integrated across devices.
3. Pilot Strategies:
Example: Slack initially launched a small pilot within a few companies to refine their product based on feedback before a broader release.
4. Localize Marketing Efforts:
Example: When Uber expanded internationally, they tailored their services and marketing efforts to fit local regulations and cultural nuances.
5. Build a Solid Website:
Example: Mint built a transparent, user-friendly website that offered valuable financial advice and tools, attracting a large user base even before their product was fully launched.
6. SEO and Content Marketing:
Example: HubSpot invested heavily in SEO and content marketing to become a leading authority in inbound marketing, driving significant organic traffic to their site.
7. Public Relations:
Example: Tesla leveraged media coverage and public relations to create buzz around their electric cars, positioning themselves as an innovative leader in the automotive industry.
8. Partner Marketing:
Example: Spotify partnered with Facebook to integrate music sharing, significantly expanding their user base through social media exposure.
9. Remote Operations:
Example: GitLab operates as a fully remote company, investing in tools and processes to maintain high productivity and team engagement.
10. Repurpose Content:
Example: Buffer repurposes their blog content into podcasts, infographics, and social media posts to maximize their reach and impact.
11. Minimal Advertising:
Example: Glossier used minimal advertising and focused on social proof and influencer marketing to grow their brand organically.
12. Industry Events:
Example: Salesforce made a significant impact by attending and presenting at major tech conferences, showcasing their CRM solutions to a targeted audience.
13. Segmented Pricing:
Example: Mailchimp offers tiered pricing plans, including a freemium option, to cater to different customer segments and encourage upgrades.
14. Create a Community:
Example: Harley-Davidson built a strong community of enthusiasts through events and social media, fostering brand loyalty and advocacy.
15. Legal/Data Privacy Certifications:
Example: Zoom obtained necessary certifications like GDPR and ISO to assure customers of their commitment to data privacy and security.
16. C-Suite Speaking Opportunities:
Example: Amazon's Jeff Bezos regularly speaks at industry events, positioning Amazon as a thought leader and innovator.
17. Social Media Presence:
Example: Wendy's has built a strong social media presence through witty and engaging content, increasing brand visibility and engagement.
18. Video Marketing and Podcasts:
Example: Dollar Shave Club's viral video campaign was pivotal in establishing its brand and driving significant sales.
19. Build a Lead Pipeline:
Example: HubSpot's comprehensive lead generation strategy includes targeted content, lead magnets, and email marketing to nurture prospects.
20. Email Marketing:
Example: Grammarly's email marketing strategy effectively nurtures leads and retains customers by providing personalized content and usage tips.
21. Focus on Less Competitive Geos:
Example: Xiaomi initially focused on the Chinese market before expanding internationally, allowing them to build a strong foundation in a less competitive market.
Conclusion
If you have limited resources, focus on:
Building a Website:
Example: Squarespace offers easy-to-use website-building tools, helping startups create professional websites without a large budget.
SEO and Content Marketing:
Example: Moz started as an SEO blog and tool provider, growing their user base through valuable content and SEO best practices.
Participating in Local Events:
Example: WeWork held local community events to build brand awareness and attract new members to their coworking spaces.
Offering Free Trials and Gifts:
Example: Shorter Loop's freemium model allows users to try their project management tool for free, encouraging upgrades to premium plans.
Engaging in Referral Marketing:
Example: Dropbox's referral program incentivized users to invite friends, leading to exponential growth.
Exploring New Geos with Minimal Competition:
Example: Revolut initially focused on the European market, where digital banking was less competitive, before expanding globally.
Experimenting with Pricing:
Example: Spotify experimented with various pricing models, including student and family plans, to maximize their user base.
Providing Exceptional Customer Support:
Example: Zappos is known for its outstanding customer service, which has been a key factor in its success and customer retention.
How Shorter Loop Can Help
Shorter Loop (earlier known as Prodeasy) is a SaaS product management platform to help product teams build successful, revenue-delivering products, loved by over 1,000 product teams globally and recognized as a leader in product management by various global brands: Entrepreneur.com, SourceForge, G2, Crozdesk- highest quality and user's choice awards, Slashdot, CB Insights, and Tekpon. Scale-ups, SMBs, and enterprises adopt a streamlined product management process with Shorter Loop’s unified product management platform to deliver customer-centric products that consistently achieve business objectives.
With its focus on continuous discovery, Shorter Loop has enabled teams to achieve up to 80% reduction in cycle time and a 53% reduction in risks. The platform’s product management focus makes it ideal for teams launching products that need to meet revenue and user targets.
Discover how Shorter Loop can transform your product management processes, whether you are a startup, scale-up, or enterprise. Visit shorterloop.com to learn more and start your free trial today! Also, schedule a free customized demo!
Frequently Asked Questions
1. Why do startups fail?
Startups often fail due to a lack of market need, insufficient funds, the wrong team, and competitive pressures.
2. How can startups avoid failure?
By understanding their market, investing in robust marketing strategies, and continuously adapting to feedback and market changes.
3. Why do 95% of new businesses fail?
Many new businesses fail due to poor planning, inadequate funding, and failure to understand customer needs.
4. Why do 99% of startups fail in the first year?
High failure rates in the first year are often due to unrealistic expectations, poor execution, and lack of market research.
5. What are survival techniques for startups?
Focus on market research, customer engagement, innovative marketing strategies, and building a strong team.
For more information on how Shorter Loop can help your startup, visit our website.
6. When you don’t have any money, what types of marketing can you still do as a new business?
Building your website, social media accounts including LinkedIn, Facebook/Insta (Facebook or Insta recommended for B2C), researching your target audience and what industry events they take part and showing up in those local free events to create brand awareness, look for speaking opportunities to attract new peoples and also make your and your company’s brand presence
