Start-Up Struggles

It is a known fact that the odds of a start-up being successful are not good.? Many will say they ran out of money was their main cause for folding the business.? However, when you start to look at the root causes for the money running dry you come to a much different conclusion.? In this multi-part series, I will be looking at several topics that lead to start-ups struggling.

The first area is not getting the market fit correct.? You have this amazing idea that hit you in the shower this morning and you think it will be the next unicorn!? Awesome, but before you start dreaming of your next exotic supercar there are a few things to nail down first.? To build a sustainable and scalable business you need to derive value by solving pain points for enough people all the while defending your position from the competition.

Pain points are problems or issues that people are actively seeking solutions to alleviate the pain.? Many companies have a product or service that the industry does not want or does not understand.? My experience has shown that it is the latter.? Potential customers can not quite figure out how the product or service alleviates the pain along with producing value.? You need to clearly articulate what problem you are solving, describe the solution that solves it, and the value of picking your solution.? A clear value proposition will deliver this message. ? Coming up with a solid value proposition that resonates with your target audience is tough and requires lots of blood, sweat, and tears.? But trust me the time will be well spent!

How many people need to buy your solution?? One person?? A million customers?? The next step is determining how many potential customers are out there that are itching to buy your new product or service.? You may have to get creative to come up with these numbers to find good and reliable sources of information.? Subscribing to industry newsletters, purchasing industry reports, talking to industry experts, and tons of networking are good places to start.? If you need a million customers to sustain your business but you only know of one customer…well, you get the idea.? This is not going to fly.

OK, now that we have determined there will be a line around the block to purchase your new idea it is time to find out how many other competitors are out there trying to solve the same pain points.? Sorry to burst the bubble, but they're more than likely are a few others that had a similar ah-ha moment.? But hey, your killer idea must be better!? Time to find out.? What is your competition doing?? What are they doing the same and what are they doing differently?? Be honest now…I know this is super tough.? The best way to help with this is to engage industry experts that know the pain points and can give you unbiased feedback.? Talking to potential customers is another great option.? Bottom line if you are not doing something unique or creating more value than the competition it will be an uphill battle.

Understanding the market size and dynamics is critical to be able to start a business.? Going back to the number of transactions you require to create a sustainable business you also overlay that with your competition.? I know what you are saying, but everyone will want my widget!? Sorry to burst the bubble, but there will be competitors out there trying to persuade those customers to buy from them and not you.? I know it's cruel!? However, this is reality.? You just need to have an honest assessment of the market segment you are competing in and make sure you can capture enough of it to sustain a viable business.? If not, they call that a hobby.

Nailing down the value propositions, understanding the market you are competing in, and what the competition is up to is critical to starting a business.? Skip one of these steps and you are heading for disaster.? Get these right and you could be on your way to forming the next unicorn.

The Evolve Collective and the Evolve Village

We help companies in the Energy Industry accelerate growth and sales, integrate technologies, and connect those technologies directly with customers via our global network of over 100 Energy Industry leaders and experts. We believe in energy sustainability and that start-ups in the Energy Industry will be an integral part of the energy transition. We work with some of the best and the brightest entrepreneurs and companies who are paving the way for us to produce oil and gas efficiently and responsibly, as well as develop new sources of sustainable energy.

Want more information??You can contact me at [email protected]