Entrepreneurial Failure - Get Used To It
Failure is tough to swallow but, in hindsight, inevitable. Learning how to fail faster and better can help you pick yourself up and keep going if you happen to mess up.
If this sounds like a recipe for disaster, think again. It's actually better for your company to fail early on because it saves your time and resources that would have been wasted later on when there might not be any hope of success.
Before you start building your business from scratch, find out how many startups "succeed" by reading this post: http://www.inc.com/adam-cohen/how-many-startups-really-succeed-.html
In addition, consider the following:
1. Startups Fail At Their Own Determinants
Unlike most corporations with long-term-vision, startups are aggressive in their growth and very short in their expectations. Thus, going from zero to revenue in three months is normal . It's a way of defining success that you don't find among big companies. There is no harm in starting things early as failure can be beneficial at this stage because it teaches you to be more aggressive and go all out. Look at Zappos' founder: http://www.wired.com/magazine/2011/11/ff_zappos_b_rev/#all/
2. Fail Your Way To The Top
Many startups go through the "pivot" phase which allows you to fail without having to shut down. If you can't get your first product off the ground, pivot into something else and keep going if that makes sense. It's ok if you ultimately fail because in some ways "failure" is a part of the process. http://venturebeat.com/2012/09/13/how-to-survive-a-startup-failure/#comments_anchor
3. Learn To Be More Aggressive
Few stages of businesses are as risky as the early stage. In this case, it's imperative for you to be aggressive and make the most out of every opportunity that arises. You need to be confident in your idea so make sure you keep moving with whatever it is that will succeed.
4. Fail Fast & Quickly
The quickest way to fail is to follow the traditional "fail fast" model which typically doesn't work. It can take years for any startup company to really become successful especially in the earlier stages and so, if you are dealing with a startup model, it isn't wise to expect failure to be something temporary . Rather, let it be your final stage and embrace it.
5. Start With Minimum Investment As Long As You Can Afford It
The period of time that you actually spent on your startup might be meaningless if you can't afford to keep investing in it after a few months or even weeks. This is part of how startups work because the main motivation to going for big things is to get something for nothing. Let bigger companies try and fail first because their strategies are obviously different from yours . Once you have a product that works, you can start drawing bigger budgets from the resources provided by investors (if there are any).
6. Get Into The Mind Of A True Entrepreneur
Entrepreneurship doesn't suit everyone. It's about being able to take risks and make things happen when other people with similar skills would have probably thrown in the towel long before you. If you have that kind of mindset, then it makes perfect sense to build your company from scratch. It will also be easier for you to get over any failure because it's not a real failure but an exercise that is part of your learning process as a future entrepreneur.
7. Don't Get Too Attached To Your Idea
Your first idea isn't likely to be your last one so don't get too attached to it until you are sure it's going to work out. Once you have invested your time and money in something, it's going to be hard for you to shift gears if your product isn't as popular as you expect it to be. In most instances, this is why startups fail because they don't have the flexibility to make changes if the first idea doesn't generate enough popularity. Although Yahoo acquired Tumblr for $1 Billion, the company itself started out as a failing online game: http://www.nydailynews.com/entertainment/gossip/yahoo-buys-tumblr-1b-article-1.1285177?localLinksEnabled=false
8. Start With Basic Needs
When it comes to building a successful business, start with basic needs as opposed to unique or general needs. The reason behind this is that you should be able to sell your product or services just as easily as you can a commodity . Once you are able to make do of that, then start scaling up the product. Then, scale up the sales further until it becomes successful. http://articles.latimes.com/2011/nov/24/entertainment/la-et-entertainment-startup24
9. Create Something Unique But Keep It Affordable For Everyone
A common mistake that most startups make is to build a product that is too expensive for their target market. This could be a useful thing to know particularly if you are trying to create a new market or if there is no competition yet. If the sales are low, it's better if you lower the price of your product so that you can attract more customers. http://www.businessinsider.com/startups-that-stopped-being-startups-2010-9#ixzz2aIOQPYE8
10. Get Your Cash Flow Under Control
One of the most important things about starting your own business from scratch is not having enough cash flow management experience .
Conclusion
This article is meant to give you an idea of how startups work and how to start one from scratch. It's not a complete guide since there are other factors that you need to consider. But if you follow the tips listed here, then you will be in good position to succeed in your startup venture. In addition, the information provided here can be applied in any other business venture or company setting where there are no profits or growth yet but need a structure and an understanding of finance that is truly holistic.