By: Ellie Coverdale
Many technology start-ups fail because of a collection of common mistakes. Most make it to their fourth year of business, after which around half of them fail. This can be attributed to a lack of relevant products, teaming problem, financial instability, tough competition and misguided marketing.
Involvement with people who don’t share your vision
A first big mistake is collaborating with people and even other brands who have no respect for what you stand for. Many startups tend to rush into collaboration and securing investors for the idea of branching out. Though this is crucial for overall business success, though if VCs don’t care about your company, they are very likely to sell you out to other shareholders. These names care about money, not your product.
Non-disclosure agreement problems
This type of contract stops the possibilities of employees leaking sensitive information that could tip other companies of company secrets or could lead to them profiting from your data. Non-disclosure agreements will stop people who are in on your brand’s ideas from taking them for themselves.
To ensure your non-disclosure agreements are well-written, consult a lawyer. Investing in their talents will make the agreement relevant to your company and will make it legally binding.
“Make sure all employees sign. Make sure friends sign. Know that international non-disclosure agreements will not always follow one set of jurisdiction – avoid them where you can,” says Florence Wade, data analyst for State of writing and Revieweal.
Failing to understand your brand financing
Having a separate financial team is how to bypass this issue. If you don’t have a plan to manage finances, you aren’t mature enough to sell a product/service. How much do you need to sell to break even? What is the best way to plan salaries – when should these be paid; how much should they be? What are the production costs for your product? These questions are a few of the minimum you should be asking for brand financial responsibility.
Offering software as a service (SaaS) without clear strategies
Many platforms offer the ability to have SaaS. Try not to branch onto too many of these platforms as it will quickly become chaotic to manage.
“You’ve likely read that in digital marketing, using multiple platforms is the best way to promote content. That’s not necessarily true when finding a space to sell SaaS. It may end up with incomplete projects and team members unsure of their roles.” Says Brenda Anderson, start-up consultant for Study demic and Academized.
Hiring an inadequate team
Failing to bring the correct people on board will lead to the sinking of the ship. Technological knowledge and personality should make up the two largest determining factors of your hiring decisions. Understand that technological skills and knowledge can also be perfected on the job, whereas hard personalities can be very hard to change. Whether your team is adept in technology or not, incorporate simple teaching programs to keep everyone at the same level.
Lack of company culture
See your company as a reflection of yourself. This includes your visions and beliefs – if your company has a culture that reflects this, you are more likely to attract team members of the same wavelength. There will be a higher feeling of inclusion, too.
Staff retention is facilitated by a strong company culture. This shifts staff mindsets from seeing your brand as simple work, to more of a lifestyle that they are dedicated to. Naturally, productivity will increase and be maintained. You will worry less about assigning duties and making sure they are met.
Ellie Coverdale is a career and marketing blogger with Paper Fellows and Big Assignments. She enjoys researching marketing trends and working with businesses to implement them and analyse results. She is a digital nomad who also teaches writing skills at OX Essays and travels the world