Business models are under constant change in the digitized business environment. Particularly, if you are an app-based start-up, you have several challenges to address including marketing problems. Here, you will come to know about the most common problems that prevent startups from succeeding in the market place.
Marketing problems
Marketing continues to be the weak point of most startups. However robust your product is on the technology front, a weak marketing plan prevents it from being successful in the market place. It is important for startups to come up with a viable marketing strategy.
One of the common issues that startups face is that the product they launch has a little or no market. You might be familiar with some of the following conditions.
Many times startups fail because their marketing strategy is too weak to make the company competitive. The business channelizes its resources in developing products that few people would buy. You need to work on the ideas and validate the same before you come up with a marketing strategy.
Sometimes, the startup product’s value proposition is not compelling enough, or no compelling event comes around, that compels the buyer to purchase the product. It is important to prioritize what the customers expect, rather than what the product is offering. Therefore, you need to deal with the market problems at the outset and identify what people actually want.
Another issue that startups encounter is that they enter the market at the wrong hour. The product may either be ahead of the market or backdated. Either of these two situations can cause a hurdle for your business. Therefore, the marketing strategy needs to be optimal and well-calculated for a startup to succeed.
Failure of the business model
At times, startups are unable to gauge the amount of challenge they are likely to face. They appear to be too optimistic when it comes to customer acquisition. Eventually, the business model fails and so does their business. You might assume that you are building an interesting product, service or website. Therefore, customers are likely to accept the product. However, this happens only with a few customers and eventually, you fail to make your mark in the industry. In many situations, the cost of gaining a new customer exceeds that of the lifetime value of the particular buyer. Eventually, the costs keep rising, which makes it difficult to run the business.
Therefore, startups should aim to gain new customers at the least expense possible. The lifetime value of customers should be obviously greater. Finding the realistic cost of acquiring a new customer is diplomatic indeed.
Poor management team
A weak management team is often responsible for the poor performance of the startup. Mistakes can take place in various areas when it comes to management. Making a new startup successful requires tremendous amount of work and initiative. This is not for the weak-hearted and those without an appetite for facing obstacles. Also, those not having the discipline to work systematically or in team settings make the management team weaker. Talent is not a substitute for working dedicatedly on making a startup successful. Sometimes, very smart people opt for startups motivated by fancy success stories. No doubt, they are talented but they need to work hard and serve the clients to become successful like their startup idols.
Poor Execution
Poor execution of the marketing strategy can also lead to failure. This can result in problems like the product not getting developed accurately, or timely delivery of products. The marketing process for app-based startups is often poorly implemented, leading to failure. Successful startups are those that execute well.
Cash shortage
One of the prime hurdles that app-based startups face is that they run out of cash. The CEO needs to assess the possible expenses and overestimate the costs. This is called conservative planning but is very helpful in preventing cash shortages. The startup should have enough cash to be alive until the product picks up. Lack of conservative cash estimates along with wrong cash planning causes startups to fail.
Startups should avoid common mistakes to avoid repeating history
It is true that each startup faces a unique challenge and situation. However, it is important for startups to shield themselves from the common mistakes made by previous startups to avoid repeating history. As they say, “Those who do not learn history are doomed to repeat it.” Smart startups are those that face the reality and make plans to ensure they don’t repeat mistakes of the past.
