They run out of cash, of course!
Well, no. Actually, that’s only the #2 reason. If startups fill an important need, they usually find the cash — from investors, customers or friends. So what’s the top reason for failure? CB Insights analysis of The Top 20 Reasons Startups Fail indicates the #1 reason, common to a staggering 42% of failures, is a lack of market need. If nobody needs you, why should you exist?
Picking one or two markets is one of the toughest bets a startup can make because by picking one market you’re giving up others. By selecting bowling allies, you’re saying “goodbye” (at least for now) to hairdressers and yoga studios. If you focus on financial services, you’ll miss all those healthcare prospect meetings at the next giant HIMSS conference. Who wants to exclude potential customers?
To really solve a problem and build your company means making a tough choice. After all, if you don’t know who your customer is, how do you know how to define the product to ensure you really meet customer needs? How do you target your marketing and selling resources? How can you be sure your reference accounts matter to new prospects?
Making a market bet is tough, but necessary. And while it may exclude some potential buyers, it also signals to those you really want that, “yes,” you are devoted to their success. Saying “This is our market” also helps target customers opt in and helps you build your buyer community.
So picking the right market — and ensuring you do get it right — should be at the top of your business launch to-do list.
If you know which market is the right match and you just need this encouragement to muster the courage to say “yes” to some and “no” to others, we wish you smooth sailing. But if it seems daunting to select from among attractive markets and then tailor your pitch so your target buyer knows how you help them succeed as no one else can, drop us a line. Our market selection followed by sales and marketing team training on tailored pitches has led to major revenue growth in startups and public companies alike – 8 record quarters in a row in one case.
Not ready to say hello yet? You may like this third-party profile of our winning approach. Then let’s talk.
If you’re ready to grow, embrace your bet!
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