29 takeaways from this lecture:
00:00:01 Whenever you’re investing time and money into a training for you or for your company, you need to take the following points into consideration:
- Do you like the training?
- Will you learn something useful?
- Will the training change your behavior?
- Does the training meet your goals and objectives?
- How applicable is the information learned?
00:00:38 The top 25 reasons most businesses fail within four years are due to:
- Entrepreneur loses hope. It takes a long time to get a business up and running, and entrepreneurs unable to invest the time necessary will give up and move on. For more on this, watch the talk Managing Your Professional and Private Life by Oussama Ammar.
- Entrepreneur lacks objectivity. Don’t fall in love with your product and be able to make business decisions objectively.
- Wrongly anticipated costs and timing. Your business idea might be a great idea in four years, meaning you’ll need to wait for the world to catch up with your business, or invest now so that when the world is ready you’re already the front runner. In his TED talk, James Cameron explains he wrote the movie Avatar 10 years before the technology existed to be able to film it.
- Inadequate or incorrect consumer testing. To learn more on consumer testing, read my interview with Peter Spear on Brand Listening vs. Consumer Research.
- Inadequate communication on product and/or brand.
- Employees don’t believe in product. To learn more on recruiting at the early stages, watch the lectures The Importance Of Choosing Your Team & Execution by Sam Altman and Identifying & Developing Key Employees and How To Keep Quality Employees by Armin Trost
- Bad idea from the very beginning.
- Entrepreneur falls in love with product. There is a difference between being passionate about your product and falling in love with your product to the point you cannot make the tough decisions to improve or abandon it. On an episode of Shark Tank, an entrepreneur pitched Bullet Ball, a product he had suffered for for over 20 years. Despite experts advising him to let it go and cut his loses, he continued to cling desperately to it.
- Inadequate research and development.
- Bad advice from friends and family.For more on avoiding this pitfall, watch the lecture Growing From Zero to Many Users by Adora Cheung.
- All budget spent on product creation, insufficient budget for marketing and advertising. Even with advertising campaigns that go viral, brands invest a lot of money making it viral. For more on this, watch the documentary Generation Like by Douglas Rushkoff.
- Strategic marketing mistakes. For more on identifying and communicating your product’s USP and personality, read my interview with art director Julien Hérisson.
- Unclear or faulty purchasing process. If customers get all the way to your checkout and it doesn’t work, or is too compliated, they will abandon their cart and probably not tell you why they didn’t buy, so you will have no idea why people aren’t buying. For more on troubleshooting your website, read my interview with data consultant Benjamin Descazal.
- Product launched too quickly/at the wrong time. For more on brand activation techniques, read my interviews with account manager Léa Stagnaro, Olga Samama and Igor du Besset.
- Governmental regulatory changes. In 2012 a successful Kickstarter campaign had to refund $139,170 when Apple changed their power cable attachment, rendering the product useless.
- Ineffective or incomplete advertising/PR campaigns. For more on running a successful public relations campaign read my interviews with public relations officers Heather Huhman and Daphné Claude and watch the lecture Doing Things That Don’t Scale & Public Relations Tips by Ycombinator at Stanford University.
- Too dependent upon PR campaign. Marketing and public relations serve distinct purposes, and you should have the right objectives and expectations before investing in each one.
- All budget spent on gaining first trial, insufficient budget for gaining repeat trials. For more on avoiding this pitfall, watch the lecture Growing From Zero to Many Users by Adora Cheung.
- Business idea based on a passing fad.
- Product priced too high for consumer acceptance. For more on product pricing and packaging congruence, read my interview with art director Marine Soyez.
- Product incongruent with brand perception. For more on defining your brand perception, read my interview with art director Gregory Ferembach.
- Wrong target demograhic.
- Offensive/defensive moves from other brands. Apple bought Dr. Dre beats for $3 billion in part as a defensive move to further differenciate themselves from their competition. For more information on business as war, read the extremely informative book Defending Your Brand by Tim Calkins.
- Bad luck. For more on how to hack luck in the process, check out Why ‘Being Lucky’ Is A Crutch & 5 Strategies to Improve Your Luck.
00:03:39 The advantage you have as a young entrepreneur today is that you are in prime position to see what is happening now and identify where markets are moving. The older you get, the less you’ll understand technology and be in a position to start over, and those generations under you will then have the advantage.
00:12:44 All of these 25 causes for startup failure boil down to two major problems:
- Entrepreners don’t know how to properly build a branding strategy to limit failure.
- Entrepreneurs lack the budget to hire professionals to advise them in their branding strategy.