Top Mistakes of Small IT Startup
A relatively low project success rate, as well as the presence of popular mistakes in startups, is typical for the venture capital market.
The latest statistics show that 75% of US projects that received venture capital investments between 2004 and 2010 were unsuccessful and did not return the invested capital to investors.
Analyzing negative foreign experience in building IT projects, it can be assumed that novice entrepreneurs continue to make mistakes when working on startups.
The mistakes can be different, but among them, there are the most common ones that can be taken into account when planning a business.
Choosing the wrong niche
The most common mistakes:
* Projects are created in too narrow niches (in order to avoid competition), and this will not allow a startup to scale in the future: the target audience will be limited; At the same time, the following research should be taken into account as you consider how to scale a startup: About 70% of startups grow too quickly. Additionally, 93% of those startups never generate more than $100,000 in monthly revenue. Before accelerating your company’s growth, as Sloboda Studio experts advise, make sure it is prepared.
* A novice entrepreneur is going to invent something new, not being an expert in his field and not having many years of experience in it;
* The startup is trying to clone an already successful project without having financial, technical and human resources similar in volume and quality to the prototype, while the clone is going to compete with the original in the same market.
Lack of understanding of the user
Sometimes startups say: “Our clients are the whole market”, “We will make a product that will definitely shoot due to the viral effect”. But in order to really understand what the market needs, it is necessary to set up high-quality feedback from its users. Knowing how the team studies clients can help predict the likelihood of project success in the future.
The startup has been launched, but the project team does not have enough money to move to the next stage. Perhaps the founders miscalculated the necessary costs, spent too much, and are now looking for another investor in the project.
Low qualification of programmers in the team
A startup is very likely to fail if there are no qualified technical specialists on the team, such as backend development services by 8allocate. Lack of good programmers can be a valid reason for an investor to refuse funding a startup.
Lack of MVP (minimum valuable product)
No matter how innovative the technology is, it is not the technology that needs to be tested first, but the product itself. It is necessary to understand with the help whether buyers are ready for this product and whether it will be in demand on the market.
Often in startups, the launch of a product is constantly postponed: the creators strive to improve or modernize something. The question arises: is there any point in the existence of a product that is in an endless stream of improvements and changes without entering the market and receiving feedback from users?
If a startup has already received quite a lot of refusals from investors, and the project idea has not been transformed, perhaps he is so stubborn that he will not agree to change the product concept or business model, even if the market shouts to him about it. Here it is necessary to distinguish unreasonable stubbornness from necessary perseverance.
Lack of preliminary agreements between the founders
If the founders have not yet reached an agreement among themselves and have not signed agreements that detail the expectations of each of the parties and the legal relationship between the founders, then in the future the project may face difficult times due to internal proceedings.
However, with the right approach, you can avoid all these mistakes and successfully run the project. Also, do not forget that a lot of things also depend on a dedicated software development team, so it is best to contact exclusively professionals.
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