Post Mortem of 101 startups
Creating a startup has a high level of risk. To reduce the level of risk it’s important to know why other startups fail so that you can avoid their mistakes.
Let’s look at the research that came from the death of 101 startups, looking closer at what exactly led them to fail.
Out of 101 startup founders interviewed, 42% failed as there wasn't a market need for their product/ service meaning that there was no problem in the market, no pain and no need for what they created.
17% of all the founders interviewed had a poor product, meaning that for the problems and needs they identified, they weren't able to come up with a proper value proposition to solve these.
14% of those start-up founders who failed believed the only reason they failed is because they ignored their customers and didn't really listen or research to collect customer insight.
A lesson we can learn from here is that the majority of companies who failed did so because they weren’t listening to their customers.
In this section I'm going to show you how you can get customer insights based on your business model and how you can test whether customers actually have a need for your product.
There are a couple of questions that you need to answer in this section:
Number one - “Who has the pain?” “Who has the need in the market?” This really helps you identify your customer segment in more detail.
Number two - You have to understand “what is the pain or what is the need in the market?” This really helps you understand exactly what people are looking for.
Number Three - We want to have a look at how it is currently being solved. Just by having a look to see if there is a need from the customers doesn't quite give you the total picture and eliminate market risk. Therefore, you really want to have a look and a deep understanding of who the competitors are, what the alternatives are that customers are looking for.
LEARNING: To sum it up, what you can understand from these 101 start-ups and start-up founders and why they failed is that they had a lack of understanding about their customers. In particular looking at customers, the customer segments, and the pains that they're experiencing.