Summary of eight reasons for entrepreneurial failure

Summary of eight reasons for entrepreneurial failure

The word entrepreneurship seems a bit expensive, laborious and bitter, but there are still many entrepreneurs. The following summarizes eight reasons why I failed to start a business for your reference, hoping to help friends in need.

Summary of eight reasons for entrepreneurial failure;

In this society with severe employment, entrepreneurship has become a new way for many people. However, on this entrepreneurial road, not everyone can go to the end, not everyone can succeed, and countless people fail. The same is entrepreneurship. Why did some people succeed and some people failed in the end? Below, summarize the eight reasons why entrepreneurs fail.

One of the reasons for entrepreneurial failure: paying attention to superficial phenomena rather than analysis.

Entrepreneurs often judge the feasibility and future prospects of the project through investment documents, ignoring market research. Whether a project is good or not depends mainly on whether there is demand. If there is no consumer demand, even the best products are castles in the air, and it is useless to look good.

The second reason for the failure of starting a business: judging whether consumers can accept it with price.

On the surface, the price of products is indeed the key to affect consumption, which is a very common low-price strategy. In fact, price is only a factor, and it cannot represent the attitude of consumers. The price of a product mainly depends on how much benefits it can bring to consumers and what kind of happiness it can bring to consumers. If a product is liked and accepted by consumers, the price is not a problem. If consumers are not optimistic about this product, price is the main factor. Successful businessmen will guide consumption, and price is never the main thing.

The third reason of entrepreneurial failure: self-confidence is the key to success and the cause of failure.

Self-confidence is a necessary quality for starting a business. Without self-confidence, you will hesitate to do anything. You are afraid of wolves before and tigers after. And why is it the cause of entrepreneurial failure? Self-confidence is a kind of self-confidence, not blind self-righteousness. Entrepreneurship is a process of self-correction. It is not surprising that people are not perfect and have problems of one kind or another. What is important is that they can find their own shortcomings at any time and correct their entrepreneurial route at any time. What's the use of self-confidence if they don't have these?

The fourth reason of entrepreneurial failure: there is no clear business direction.

When some agents realized that this was a good product, they immediately decided to act as agents and placed an order immediately. I think this is the bright side. The opportunity to start a business will not wait for people, especially regional agents. With an agent around here, there is no chance for the next one. After being an agent, I'm not sure where to start first. I should conquer the market first. Without a clear business direction, it is like a blind man touching an elephant. What is the probability of success?

The fifth reason of entrepreneurial failure: there is no strict execution and things are inefficient.

Easy market manufacturers don't have any marketing plans. Considering that entrepreneurs are generally novices, I learned in the process of communicating with agents that novices often don't have the ability to explore the market and need guidance and help, so I made an operation plan and conducted a small-scale market operation test, which achieved good results. This operating plan is given to agents, who often discount it when implementing it and do not strictly follow the plan. Even delayed to operate the market and open up the market, resulting in low operating efficiency.

The sixth reason of entrepreneurial failure: lack of learning ability.

Many entrepreneurs themselves have no learning ability. In fact, learning is not equal to knowledge level. A knowledgeable person is not necessarily a person who can learn. People who are good at learning can learn some business knowledge from others. No matter how confidential the business knowledge is, as long as they have articles, they can see some business strategies of others. This is the purpose of learning.

The seventh reason of entrepreneurial failure: lack of professional ability.

Professional ability seems really difficult, and it is not something that ordinary people can learn and form in a short time. Professional knowledge needs to be organically combined with hands-on. In fact, it is not difficult. It is not impossible to form professional ability while learning, so it is difficult to start a business.

The eighth reason for entrepreneurial failure: I don't know how to market myself.

Businessmen do not sell products, but sell themselves. A person who doesn't know how to sell himself has little chance of success. People who are used to saying how good their products are will never sell them. Marketing yourself is how much benefit you can give others, how much happiness you can give others, and those who can give others happiness are the people who are likely to succeed.

An overview of the causes of entrepreneurial failure:

Labit is a website that helps researchers create web pages for their laboratories. Now this website no longer exists. 20 17, 17 On February 5th, we shut down the server. Our website no longer exists. Closing your business is a bit like losing someone you love. The following are the mistakes I made as the founder and CEO of Labit and the painful lessons I learned.

Mistake 1: Failed to choose a suitable co-founder.

Soon after we started our business, we invited a third person to be our co-founder. He is a very clever man and an excellent scientist, but his emotional intelligence is very low. Many times he is very emotional and takes a long time to calm down. I think I can stand his low EQ because of his wisdom.

But it turns out that I was wrong. He didn't finish several tasks assigned to him by me. We specially arranged a meeting to discuss this problem, but at first he got angry, stood up and slammed the door and left. At that moment, it was all over. We both know that we can't cooperate with him. This person is immature, does not admit his mistakes and cannot accept constructive criticism. With a little pressure, he will collapse, and pressure is a normal state in the development of startups. He will damage all the business of the company in an emergency. I can't let this happen. Many people expect me to lead this company to success. I have to let him go. I lost a friend, but I saved a company. At least temporarily.

Error 2: Failed to innovate from 0 to 1.

Peter thiel's From Zero to One is highly recommended. The core idea conveyed by this book is actually very simple. All great companies innovate vertically, not horizontally. They enter from one floor to another.

This is where we failed. We want to be the Facebook of the research lab. There are also many opportunities and cases of cloning successful companies in the market, such as Uber in the pet industry, Facebook for children and Airbnb in the parking lot. First of all, when you do your project promotion according to this idea, it sounds like plagiarism, which is very bad. Secondly, if your company has no innovation from 0 to 1, even if your company's execution ability is excellent, your company's chances of growing into a great company are very slim. Which is more important, idea or execution? The answer is: both are important.

Error 3: Unable to select the appropriate target user.

At that time, when selecting target users, we were faced with several choices: B2C (consumer-oriented business), B2B (enterprise-oriented business) and B2A (academic-oriented business). In the end, we chose B2A, which is also the worst choice.

It is very counterintuitive to think about academia from the perspective of innovation. Outside observers may think that scientists are innovators, because scientists are people who stand at the forefront of technology and innovation. Right?

Don't!

People in academia are actually very reluctant. The researchers buried themselves in the feasibility study and couldn't see anything around them. Most management positions with decision-making power are held by conservative people. They are satisfied with the existing system, and they don't care whether they can improve efficiency by providing some technologies.

We are scientists ourselves, so we are driven by a noble intention, that is, to contribute to our society. However, we failed to admit the obvious lag and inertia of the academic community, and paid a heavy price for it.

Make sure you start your business in the right place.

Choosing to start a company can already be a reason to question you. As a foreigner, choosing to start a business in Korea is downright crazy. Culture and language can determine many things. I was surprised to find that so many people different from me live on the same planet. Are Koreans aliens? Or should I say, are we aliens? The way they experience this company is puzzling. Meaningless bureaucracy and rules are very torturous. South Korea's academic culture is a completely different story, which deserves a separate analysis. The struggle is real.

Geographical location is very important. Living in Gwangju, 268 kilometers away from Seoul, isolates us from the entrepreneurial atmosphere and potential contacts that Seoul can provide.

If we start a company in America or any English-speaking country, we can do a lot of things. Of course, my situation may be different from that of your business, but I want to emphasize that it is very important to start a business in a suitable environment. You can choose Silicon Valley or any major technology entrepreneurship center in the world. Starting a business in a small city far from the business world will make you fight two wars.

Mistake 4: Failure to fully verify entrepreneurial ideas in time.

This is exactly where we encountered problems at the beginning. The mistake I made in this respect is one of the most common mistakes in starting a business: I idealized the objective reality too much.

I think this pain point encountered by users is much more painful than it actually is. In fact, this is not so much a problem as an inconvenience. But I convinced myself and others that the scientific community needed us to provide solutions. I was driven by this vision and finally took me to the wrong place.

Make sure that the problem you want to solve is the real pain point of users, not just the simple inconvenience. Don't fall into what you want to believe. Thoroughly verify whether your entrepreneurial idea is feasible. I recommend reading the book Lean Entrepreneurship by Eric Rees.

Research can give you some information, but in most cases, they are not very valuable. They don't represent the real situation.

Please have a real interview with your users. Don't try to sell. By sales, I mean don't try to impose an idea on users. Show your products and ideas to users objectively, and then observe their reactions.

When you talk about your ideas, be objective. Observe people's reactions and ask them how they will use the product. Will they buy products? If they are willing to buy, how much are they willing to pay for the product?

The only guiding principle of this step is the motto of Y-combinator, the world's top business incubator: develop products that people really want.

Y Combinator means that before developing a product or writing the first line of code, you should make sure that you can find potential customers and successfully promote your entrepreneurial ideas.

Make sure you can find someone who is willing to pay for your product. Or in the words of Brian Ceschi, CEO of Airbnb, it is much better to have 100 people who really love your product than to have 1 10,000 people who like your product.

Error 5: Failed to publish the product quickly.

In this way, we developed the MVP. My team developed the initial version of the product in less than 2 months, and this version of the product is ok. I should release the product immediately. But I waited too long. If I could go back in time, I would tell myself: just release the product quickly!

I spent a lot of money to redesign products, including logo design, and developed some additional functions. I want the first users to feel that this product is a perfect product. It took us several months to upgrade from alpha version to beta version. In fact, the alpha version is about to be released. Although the beta looks better, it doesn't need to take months. I wasted a lot of time polishing a product that we are not sure people will need.

This mistake is one of the most common mistakes made by entrepreneurs. The founder was very hesitant when releasing the product. They always try to iterate over an unreleased product. In fact, the goal of this stage is to release products and start learning from the feedback of real users. The first version of the product is ugly, a little flawed, incomplete and acceptable. Bring your ugly "child" into this world and let it evolve.

Error 6: Failed to raise enough development funds for the company.

One of the most important duties of a company CEO is to ensure that the company has money. In fact, in the early days of the company's development, this can be said to be the only job of the company CEO.

Make sure that the company has money in its bank account at all times. I raised some money from the Korean government. The way we use this money has serious limitations, but we have successfully developed MVP, successfully designed product logos and interfaces, and invested a little money in marketing and company registration. There is another reason why founders should not care about competition. As paul graham, the godfather of entrepreneurship, said: The most common cause of entrepreneurial failure is not competition, but suicide.

Companies that run out of money are doomed to die.

Error 7: Failed to form a reliable team.

In addition to raising funds, the second important job of the CEO of a startup company is recruitment. Every CEO I meet says that recruiting the right people for the team is the most difficult task. First, it was wrong to find the co-founder, and then it was wrong to recruit team members.

We met an excellent programmer and database engineer. He is an absolute expert in his field, and I made another mistake in recruiting this person. For a non-technical co-founder like me, his professional level is daunting. I believe he can finally solve the problem that we spend too much money on freelancers. So I started paying him very little money to help supervise the two freelancers we hired. But they don't need supervision. They did a good job, so the man didn't do any work in the end, but he got an economic return from it. If he can learn the framework of this product as he promised, there will be a problem. But he didn't do anything. He is a typical man of words and deeds. I made the same mistake twice.

One of my own problems is that I always think people better than they really are. I believe people can change. But many times, they proved me wrong. This guy is a real mess. After falling in love with a Korean girl, he changed from a lifelong atheist (also a scientist) to a superstitious person overnight, and they got married after dating for two months.

If the fact of his poor professional quality and lack of honesty has not endangered our company and team, then the life of this person and others has nothing to do with the topic discussed in this article. What I want to say here is: be careful when recruiting people.

Even if your potential employee is an excellent engineer, if he is dishonest, he will let you down.

If your team members only work for money, they lack the same motivation as you. Once the company has problems, they will leave immediately.

The first employees recruited by the company are as important as the founders themselves. They will define the DNA of the company, and the future employees of the company will be based on the first batch of employees. If you don't recruit the right first batch of employees, you will bear the adverse consequences of this problem throughout your entrepreneurial career.

The best book I have ever read on this topic is Hello, Start a Business by yevgeny brickman. Chapter 1 1 of this book is devoted to recruitment, which is also the essence of this book. This book is very valuable and recommended for reading.

Of course, there are also very suitable people. It is difficult to find decent people with skills. But sometimes you will find real diamonds. The paid freelancer who initially worked for us finally agreed to formally join our team. They believe that our entrepreneurial ideas have the potential to develop into large enterprises, so they should join us even if they make salary sacrifices. These people are amazing. I haven't seen them personally, and I haven't had much communication online, but their professionalism and integrity have never made me doubt them.

There is a hidden rule that all of us follow: one person is responsible for saying and one person is responsible for doing. I believe this is the only correct way to do things. Developers always finish assigned tasks on time. They are very efficient and responsible. There is also a rule that the team of a startup company should follow: stick to recruiting the right people.

Error 8: Multitasking

If you have a full-time job, it is extremely difficult for you to start a business while working. At the end of every day's work, you are exhausted by the day's work, so you naturally want to have a good rest after work. Everyone's energy is limited, and everyone has only 24 hours a day. If you have multiple jobs, full-time jobs and start a business, something will definitely be affected.

What's worse than starting a business while working full-time? Yes, it is to start a business while studying as a graduate student.

When you are a master student or a doctoral student, you have no life. If you try to start a business after graduate school, your life will become a hell on earth. This is a suggestion for all students who are considering starting a business and planning to drop out of school:

Don't start a business while going to school, and don't drop out of school to start a business. Finish your studies first. I am serious. Get a degree and get it done. No matter what you do after graduation, the interviewer will attach great importance to your academic qualifications on your resume during your job interview. Having a degree will open many doors and bring you many opportunities. Entrepreneurship can wait. You can't neglect your studies.

If you don't take my advice. Still choose to start a business while working, or start a business while going to school. Welcome to hell. This article is about some things you must know in the early stage of starting a business.

Mistake 9: Failure to manage the company's expenses.

There are several points that need special attention:

(1) Don't register the company immediately. There is a very famous service called Stripe Atlas. You only need to spend $500, and it can help you complete the company registration, and it will be quick. So don't be busy registering a company from the beginning. In the initial stage, there is no need to register a company. Only after your company has income or you find investors who need you to register the company. If you register a company, it is best to register a company in Delaware. There is no need to innovate in this respect, just follow the crowd. Stripe Atlas will automatically open a bank account in Silicon Valley Bank for your company. Of course, you need to pay separately here.

(2) Bank account maintenance fee. Silicon Valley Bank will charge you $25 a month for maintenance. In the early days, this was an unnecessary expense.

(3) The cost of the server. Even if you maintain your website at the lowest cost, you need to spend about $20 a month. Make sure you have enough money to pay for the server.

(4) Wage expenditure. If possible, it is best not to pay employees. Find someone who shares your vision and dreams. These people are willing to work to achieve the company's goals and get a certain share of the company. Don't be too stingy when distributing shares in the company. In terms of share sharing, be very generous to those who help you build an enterprise empire.

If your company is worthless, even if you hold 0/00% shares in the company/kloc, you are worthless. If your company is worth $65.438+0 billion, even if you hold 654.38+00% of the company's shares, it is also a huge wealth.

Mistake 10: I am not prepared for the failure of my business.

I'm not going to let myself fail. I thought I was ready, but I wasn't. I have invested too much in this venture capital, and it is not good to watch your venture ship sink.

Of the average 10 startups, 9 will eventually fail. This is a fact that Y Combinator people have always believed in. I believe this data is very close to the truth. Running a startup is extremely difficult, and it is almost impossible to find the right direction from the beginning.

Elon musk once said: "The so-called entrepreneurship is to chew glass and stare at the abyss."

Thank you, Musk. He vividly expressed the true feelings of starting a business.

Disclaimer: This article comes from TAC accelerator, which is for reference only and does not represent the views of this platform. If there is any infringement, please contact us to delete it.

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