Why would you ever want to use those strategies? Hopefully you won’t, but you might be in danger of doing just that without even knowing it. “How to make your startup fail” was the key topic when Paul Ahlstrom, founder of Alta Ventures Mexico, made his phenomenal speak on the last day of Startup Grind 2015 in Redwood City.
Why would I ever want my startup to fail?
Well, you wouldn’t! But sometimes you can get caught up in all the well-meant advice from friends and business partners who have just the insights when it comes to making your startup become the success it deserves to be. You know that feeling?
A lot of things can be learned from success, that’s for sure, but failure is quite the learning experience too. So instead of telling you what to do to succeed, Paul Ahlstrom chose that day in the old Fox Theatre to tell you what to do if you are looking for failure guarantee.
Launch without a customer in mind
The number one foolproof way to guarantee the failure of your startup is launching without a specific customer in mind. You might be busy analyzing the market, doing product development or simply just thinking, that as long as your product is kick-ass awesome with features to die for, then the customers will be there. Recognize this? If this is the case you are in danger of repeating the Ford Edsel blunder.
In year 1958 Ford launched the Ford Edsel developed and designed to be car of the year. Unfortunately the wishes of the customers had only been guessed upon and no actual potential customers had been involved during the development process. Guess what! Despite intensive marketing campaigns, the Edsel could not bear the hype, and it was a HUGE failure.
Therefore, always remember to develop your product with a specific customer in mind. Ask them what they want. Challenge them on what they want. Use prototyping and testing. Don’t launch before you know exactly what pains your product is going to solve for your customers.
Compete with the biggest market leader for the same customers without being ten times better
Do you want to compete head-to-head with the biggest and meanest market leaders in your field of expertise? Well sure, go ahead! But please make sure that you are more than ten times better at doing your thing than they are, because otherwise you will end up being the one coloring the ocean red with this red ocean strategy.
In order to take on a market leader you have to make sure that your solution is so superior and compelling that the customers will almost ask you to pull them in – no hook needed!
Scale before you nail
If you start writing your marketing materials before knowing exactly how your product or service is going to be like, or if you start hiring your sales teams before you know what to sell, then you are definitely in danger of failing due to premature scaling.
To avoid this failure guarantee remember to nail your business model first! What is your market fit and what pain do you solve for your customers? Paul Ahlstrom is co-author on an entire book on the subject. That much of a problem is premature scaling! So start with the nailing, and after that you will have the right foundation for scaling!
Failure is the way to success
Avoiding the three strategies mentioned above is of course not a guarantee for success but they will definitely help you avoid some common mistakes experienced by more than one startup throughout history.
One of the unique things about the startup mentality here in the valley is the fact that even though your startup might fail it does not mean that you have failed as a person. It is more than okay to fail here, because you get the chance of gaining invaluable insight and knowledge that can be key to you succeeding later on.
Now go on and make your own foolproof strategies of failing so you can share them the next time you find yourself in a situation where a fellow entrepreneur is getting flooded with advice on how to succeed!