
By Nancy Lonsinger on in Agency Life & Leadership, Strategy
Why startups fail—3 life lessons from the front line
Over decades of helping many life sciences and medical device manufacturers successfully enter the market, I’ve been witness to far too many not-so-successful launches, too. They’ve included great ideas that didn’t get enough traction and good ideas that simply missed the mark.
While much of my work has been centered on healthcare, I believe the life lessons I’ve taken away from these experiences probably apply to any industry.
If you truly want to understand your audience’s pain points and motivators, you have to engage directly. A dozen one-on-one interviews or a survey at a trade show booth will give you the unvarnished truth.
Lesson 1: Get real feedback from your target audience.
Entrepreneurs often don’t see the point in reaching out beyond their networks for input. After all, they know lots of people in the industry. And, if they’ve created a solution to a problem they’ve experienced themselves, they assume they know what the market needs.
There are times this works out beautifully. Other times, it significantly limits your view. After all, talking to members of your network can have an echo-chamber effect, where people ratify what you already believe or parrot back what they think you want to hear. And relying solely on your lived experience is just one point of view—perhaps not enough to appeal to broader needs or use cases you hadn’t considered.
If you truly want to understand your audience’s pain points and motivators, you have to engage directly. A dozen one-on-one interviews or a survey at a trade show booth will give you the unvarnished truth without a big spend, and can save you much, much more. Keep it short—stick to questions you really need and know what you’ll do with the answers.
Lesson 2: Focus your launch.
New companies frequently try to reach too far too fast. I’ve bumped up against the “that’s not a big enough market” mindset many times. And I get it—it’s understandable to want to cast a big net. But if you spread your budget too thin, you won’t capture the attention of the core prospects you need most.
A better alternative is to start with focus and, as revenue begins to come in and profits are earned, invest in additional targets.
Lesson 3: Prioritize working dollars.
If you look at your budget in terms of working vs. nonworking dollars, it’s easier to see where your money should go. An idea that came out of my years in corporate marketing (in which nonworking dollars were anything beyond creative, media and promotional dollars), it’s a way to consider any spend.
That’s not to say that all overhead roles and line items are dispensable. It’s more to suggest that you should spend more on efforts that directly impact growth and sales, and avoid frivolous costs. For example, you don’t need a full wardrobe with your logo on it, but you do need a frictionless customer experience.
Extra credit: One place to save.
Pricing studies may be a good idea if you have deep pockets and understand that you won’t be getting a specific price point as the output. Quantitative results will be one input among many. What’s more, in order to be effective, pricing research requires large sample sizes, making them expensive.
Instead, a little “disaster check” research and insights from industry experts are likely to get you where you need to be.
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