Whether your startup is already there, or you just want to know more information about it just in case, this article aims to give you some tips on how to cross the “dead zone” with your business.
As 90% of the startups fail, you need to be prepared for the worse.
A metaphorical description of the “dead zone” would be the purgatory in which startups have to test their ability to serve the needs of their respective markets. They have continuously adapt themselves to those needs and last but not least, to keep the team’s passion alive even in the worst moments.
On a more serious tone, the dead zone is a prolonged period of time in which your startup, in its early stage, is able to produce money but it doesn’t show any sign of growing. Anyway, don’t imagine the profit as being huge, but neither frighteningly small.
It may sound less terrifying than the name of the period itself, but the truth is that this apparent “calm water” is a trap, hiding the abyss.
Many new folks in the business fall in it, as they get fooled believing that their startup is doing okay by looking only at the profit. Not paying attention to the growing problem is like choosing to let your startup to die.
By definition, a startup is a temporary business-project which has the main objective to grow into a big business by making a series of business experiments based on a set of assumptions. Following a basic logic thinking, it becomes obvious that the incapacity to grow marks a critical point in the development road of your startup.
To overcome this situation, first of all, it’s important to understand why this happens and to cut the cut the evil from its roots.
What lies behind the failure of a startup?
- NO MARKET NEED
Usually, the main cause responsible for finding your startup in the dead-zone is represented by a wrong evaluation of the trends in the target market.
A recent post of CB Insights confirms this. So, although the failure of a startup is the result of more mixed problems, by analyzing 101 postmortem startups they found out that “no market need” was the first cause to be blamed for the death of the company.
There will always be some people who want to try any new product. But if this product does not really serve the long-term needs of the market, its demand will decrease continuously. Thus, don’t keep your eyes only to the profit. Always be patient with how much your company grows. If it doesn’t grow, then here is what you can do:
- Invest in a great statistical program and a capable data interpreter. Here you’ll find a lot of reasons why.
- Make a serious analysis of the trends in your target market.
We know that a start-up is an experiment that wants to innovate the market, but you must know in what direction the market needs to be innovated.
- (Re)Adapt your ideas to those needs.
For example, let’s say you wanted to start a business related to mobile phones. You knew the market is somehow oversaturated, but your phone model is really cool. It has some completely new features. But… they are not some essential innovations. What do you do?
First of all, admit you were somehow wrong. Then think what would match the people’s current desire and adapt your initial product.
In our case, maybe a telephone specially created for kindergarten children? It sounds wow, doesn’t it?
- RAN OUT OF CASH
The second reason why a startup is crossing the dead zone is closely related to the first one. It’s obvious that at one point, if your product doesn’t fit the market needs, it won’t be bought and your business will end up in insolvency.
To overcome this situation, take into account the advice given in point one.
Other important tips would be:
- Before you manufacture your product in large quantities (which means a great investment), make some “test” items and see if your idea catches the attention of the general public on the market.
- Make sure your product has been promoted enough. Invest in advertisements, leaflets, reviews on the Internet etc. Maybe your potential customers don’t even know your product exists.
Don’t forget that maybe your current customers don’t want to share their new acquisitions with their competition. So, do not rely on the positive publicity they might be doing for you.
Also, remember that poor marketing destroys 14% of the new start-ups.
- TEAM PROBLEMS
In the beginning, you and your business partners seemed to get along pretty well.
You shared the same interests and your ideas complemented each other perfectly. Now, communicating with them in a calm voice is almost impossible. If your startup is dying and the description above fits your current situation perfectly, maybe it’s time to consult a psychologist.
Somebody who can mediate your discussions, who can bring to light in which point your roads split and who can find solutions to save your relationship and the whole business.
To conclude, the road to success has always been overburdened by obstacles. Only the ones capable to adapt while still focusing on their goal (the growth and prosperity of their business) deserve to fell the taste of victory.
Don’t give up. Invest in technology, advertising, and your team and never forget your vision. Also, learn from others – both from their success and failures, and you will certainly manage to break up from the dead zone.