This is the most asked question the team at IBGR encounters when working with startups. I don’t know if it is fear of the unknown or a checklist - something to take into consideration as the founders move from concept to opening their doors.
After many startups with our network of entrepreneur, we agreed there are four major causes for failure to start:
Although the list looks like different issues, in reality, it is 3 + 1. The Business Idea is a separate issue and we will address it in a later post. Today we will hit on the other 3, all issues from the same cause.
If you look at what it takes to start fast and successfully, you will find 3 distinct actions that will minimize the failure rate. Too Slow to Market and Under Capitalized are functions of the same thing. Gain Clarity quickly on what you are selling to whom and you can economize your limited budget, something you’ll need when the selling begins.
First is clarity on the brand. Exactly who are you and what does the business offer that affects the prospective customer on an emotional level? If you are selling to consumers a B2C sale, how does your offer affect their lifestyle? Understand that most purchases are emotionally based and logic is used to rationalize the choice. The first level is what they are saying about themselves to themselves from buying your product or service? The second level is what are they saying about themselves to others from buying your product or service? The clothes they wear, the perfume they wear, the car they drive, restaurants they recommend, etc. are all statements. In fact, almost every buying decision made are statements. Understanding this and determining your brand's image becomes much easier.
The issue with B2B sales, Business to Business, is a little easier. Ultimately, the buying decision is about competitive advantage - how does the purchase of your product or service impact their success. We look at just 2 issues - reduction of costs or an increase in revenue. In short margins and profit. You still need the emotional appeal first by addressing their emotions, the challenges of running a business, whether talking to the owner or members of an organization. The challenging part but most rewarding avenue is to speak to issues that the prospect feels, many times unspoken, that makes a statement that you “get them”.
This is the essence of a brand and will enable you to create an umbrella brand for the company that makes an emotional connection, product / service brand that a rational connection, and team to make personal connection.
For more information on how to build a professional brand that will connect with your customers, go to 3METHOD BrandArc™.
One last thought before we set up the next post. Overwhelmed founders arise from tackling too much and not focusing on the few things that matter. Get the brand right and then move on to the second issue - how to make a MVO (Minimally Viable Offer) by setting it up as an experiment so you can quickly adjust and make the sales necessary to prove the business idea.
Next Post - Startups as Experiments
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