Having worked in the space for some time, I have learned a thing or two about startups. During this period, I have not only spent my time crafting strategies for Sylo – at brand, communications, digital, and business levels, but also studied the startup industry around the world. This extensive exercise has made me realise why it is that nearly 80 per cent of all startup businesses fail…

Below are five common mistakes that startups make on different levels, for example – operations, business, product, marketing etc. These are generic problems and can be resolved if acknowledged and addressed. However, most of the time the entrepreneurs fail to identify them, as these problems don’t seem too critical at their inception.

1. Wrong people, wrong reasons:

A couple of decades ago people wanted to work for the advertising agencies, because it was ‘glamorous.’ They thought good looking men and women worked there, partied every day and lived an extravagant life! You know how it goes, ‘nothing was cooler than Madison Avenue.’

So, those aspirants joined advertising for all the wrong reasons. And as you can guess, most of them didn’t do much good for the agencies.

The same bug has infected the startup community. In recent years, lots of people have joined startups because to some, “… anything with startup in it sounds cool.”

And of course, they focus more on their coolness quotient. They love the idea of working in a startup more than they love their work!

But startups are not global advertising agencies with fat retainers from Fortune 500 clients… So, add a few such people into the mix at a startup and the damage (to productivity) could be catastrophic!

2. Mistaking ‘Disorganisation’ as ‘Agility’:

This is another huge problem that goes completely unnoticed. Yes, startups are not giant corporations with fixed set of rules; they need to be agile, flexible and quick on their feet! But startups do also need to realise that having a nimble-footed approach doesn’t mean running around like a headless chicken! If they are disorganised, they can’t be efficient; and if they can’t be efficient, they can’t deliver well, and on time.

3. Living in a bubble:

To me, this is the deadliest blunder. This attitude can backfire from multiple fronts. For example:

Most startups feel that they are building a revolutionary product that’ll change the world – whilst being oblivious to what the world thinks about their product, and if they need it at all! Consequently, almost half of them fail because their product doesn’t solve a big enough problem, or in simpler terms, there’s no ‘market need’.

Consumers don’t want to buy products/services because they are groundbreaking. They buy them because those products/services solve a problem for them or offer a benefit.

But if startups live in a bubble, they don’t bother doing their homework or even if they do, they do a sloppy job!

4. Planning for today; forgetting about the ‘tomorrow’:

“Failing to plan is planning to fail.”

While smart entrepreneurs plan ahead and plan well, a lot of them still fail in this area. Make no mistake, having a business plan doesn’t mean much, if it doesn’t take your ‘tomorrow’ into account.

Have you considered what happens if there’s an economic slowdown? How much can that impact your business?

Do you have a contingency plan ready?

What if your investors back out? Do you have alternative ways to bring in funds, or a well-thought-out revenue model?

Potential legal or regulatory implications?

There are usually a number of socio-political-economic situations that can impact the future of a business. If startups plan their present while forgetting about the future, they may not have a presence at all in the future.

5. Prioritising short-term gains over long-term brand building:

This is a no-brainer, but still the most commonly made mistake by not just startups but a lot of SMEs.

Prioritising short-term profitability is necessary for small-to-medium businesses. If they don’t survive today, how can they play the long game!? It’s a fair point. Having said that, if the focus is only on making immediate gains, it’s easy to fall through the cracks!

Think of an actor that is interested only in the money. They sign whatever films come their way without reading the script. They are also not bothered about their public image. On the contrary, there’s another actor that chooses their films carefully, chooses their actions carefully and works on building their public image. Which one do you think might have a long future out of the two?

When there’s two or more similar products available in the market that more-or-less have the same quality and offer the same value, people always choose to buy the one that they feel more connected with.

Long-term brand building helps businesses distinguish themselves from their competitors and create a better connection with their consumers.

In a nutshell, if startups, or businesses with a ‘startup culture’, can nail these five points, they stand a good chance to make it!

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Shaan is passionate about developing businesses, and building brands by weaving brand stories that are pragmatic, simple, yet momentous. In 2016, he was awarded the 'Star Youth Achiever' from the Global Youth Marketing Forum for creating award-winning work and pioneering digital innovation for a global brand. Shaan believes, every business, or brand has a greater purpose to serve, and our job is to help them reach their full potential by bringing that purpose to life.