Are you thinking of running your own startup? Congratulations!
Starting a business may have many personal and professional advantages, but you will also face many challenges, and, unfortunately, you could also fail.
Cambridge Associates, a global investment firm based in Boston, tracked the performance of venture investments in 27,259 startups between 1990 and 2010. Its research reveals that the percentage of venture-backed startups that fail—as defined by companies that provide a 1X return or less to investors—is around 60% since 2001.
What are the reasons startups fail?
CB Insights looked at the post-mortems of 101 startups to compile a list of the Top 20 Reasons Startups Fail. The top five most significant from this study are:
42% of startups fail because their products don´t satisfy any market need!
Does your product solve a real problem? It is a tricky question, but if you can answer it, you will be more likely to succeed.
How to find out how good your product really is.
Have you ever considered some of these questions?
Does your product have a mass market?
What makes your product different from others?
Have you invented a new product? Have you improved something that already exists?
What need do you solve?
If you have a good answer to each question, you did a great job, bravo!
So, you have a good product, right? But, have you ever thought about your buyer persona? Why should they buy your product?
How to create detailed buyer personas for your startup
You need to consider not only your product but also your target consumer.
I recommend you to follow my market segmentation approach. The more information you have, the better you will get the consumer insight.
Probably, you need to do some additional research to market your target successfully. Normally, I check some useful platforms that provide valuable information about the market:
Think with Google
It offers interesting insights on how people browse and buy.
It gives you data on what people are searching for, how trends change over time, and how search interest differs by location.
Social Mention is a real-time social media search engine that can help you understand what your prospective customers are buzzing about online.
Statista is a portal of statistics, studies, and forecasts focused on market research and opinion polling.
If you have enough budget, you should buy market reports from internationally renowned research organizations as Nielsen.
Well, have you filled all the information required for your buyer persona?
If you did, the next question is: Will he buy your product?
Probably you can’t answer this question unless you ask him. According to my experience, most companies sell the products they want to sell, but not the products that their consumers demand.
Your potential buyers are a great source of information, ask them!
I have already undertaken some product surveys. Normally, the sales department and I select the potential candidates and invite them to join a creative session about the new product.
These sessions take place in cozy spaces where the atmosphere is relaxed and friendly. Then, we arrange a series of focus groups discussion, interviews and personal questionnaires. Finally, we obtain a valuable feedback about the product.
In case that your target audience is far away, I suggest you use Facebook, the biggest social network. Go to Facebook and search for Facebook Groups where your target is. Join the group and invite them to fill your questionnaire in return for a gift.
The information gathered will help you to answer the following questions:
- What do they think of your product?
- Does the product solve their problem?
- Is the pain point serious enough that consumers will be willing to pay for a solution?
- Does your product match their requirements?
- What will they feel when they use your product?
- What are you being compared to?
- Will they buy it eventually?
Depending on the reply to the last question, you will face the following scenarios:
1.You find your buyer persona but your product doesn’t help him.
You need to find another product that solves their problem.
2.You are wrong about the buyer persona, he is not interested in the product.
You need to find another buyer persona that will get benefit from the product.
3.You find your buyer persona and he likes your product.
Congrats! Now you need to get as much feedback as you can in order to improve your product.
Product/market fit means being in a good market with a product that can satisfy that market. If you can find your fit within a market, you will dramatically increase your odds of achieving success. Product/market fit is absolutely critical to the success of any business or entrepreneurial venture.
42% of startups forget it, please, don’t make the same mistake!
POST WRITTEN BY
A Madrid Polytechnic University International MBA has worked as global marketing director in B2B and B2C international leading companies implementing global marketing and communication strategies to ensure business objectives and to optimize brands reputation and visibility on a global level.