Earlier on in the year, I came across a CB Insights article “The Top 20 Reasons Startups Fail”, it’s based on the analysis over 100 startup failures. A few of failures were linked to:
- Product mistiming
- Ignoring customers
- Product without a business model
- User unfriendly product
At CGV, we have discussed how to avoid common pitfalls with several startups. Especially, as we are keen to see underrepresented founders achieve more success.
Building a product in the most effective and efficient way is imperative at the pre-seed/seed stage because of the financial, human and timing constraints are immense.
Creating a mediocre product that does not best serve customers also carries significant financial and reputational risk. Customers may no longer believe in your brand and money can be wasted.
So how do you avoid building a crappy product that doesn’t serve your customers and effectively solves the problem you have identified? Here are critical points for startups to look out for.
You need to create a continuous feedback loop with your key customers, which can be conducted through forms, surveys, usability testing etc.
You can’t incorporate all the feedback you receive; look to put more weight on feedback from your most valuable customers. There should also be a clear focus on the user experience and simplicity of use.
Minimum Viable Product
It’s crucial that the product addresses customer pain points and solves the core problems – nothing too fancy, nothing superfluous and no frills.
The product does not need to be perfect, this will delay time to market and allow competitors to get ahead of you. It is also imperative you create a product roadmap to understand how the product will evolve; which demonstrates an understanding of the product lifecycle.
Scalability and Cost Efficiency
The cost of building, ongoing maintenance costs need to be kept to a minimum to support profitability.
Products should be scalable, i.e. built in a way that requires proportional less money, time and resource as the demand increases. This will be essential to a profitable business model.
A sharp focus on these three areas at all times will help to avoid some of the common product failures that have resulted in the death of many startups.
Operations at CGV