One Major Reason Why So Many New Business Founders Fail (and How Can You Avoid This)
There may be multiple factors to succeed, but if you want to avoid the biggest reason for failure of a startup, you can’t afford to miss this post.
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My first brush with the idea of wanting to become a business owner happened when I was in high school, and I came across this book titled “Pour Your Heart Into It by Howard Schultz.”
If that name doesn’t ring a bell, let me help you fill in the blanks.
Schultz is the man who’s responsible for Starbucks being one of the most common coffee chain brands in most parts of the world.
If you look at some of the biggest icons from the world who are the pioneers of setting up businesses in the last century (like Akio Morita, Ray Krock, Sam Walton, Phil Knight to name a few), you’d observe a stark difference in approach between founders of the yesteryears and the founders of today.
Would you like to take a moment and think about what this point of difference is?
Well, you’d find founders of the yesteryears were always busy working on their business.
Process upgrades, tweaking the systems, improving the products, creating profitable marketing campaigns would be the conversations in the founder's office more often than not.
However, if you were to get a sneak peek in the email inbox of founders today, you’d observe a very different pattern.
Today, most founders are spending a large chunk of their time not in building/ growing their business.
On the contrary, their focus is on pitching to the next VC so that they can raise more money and enhance the valuation of the business/ brand.
There’s absolutely nothing wrong with raising funds, however, today many founders and CEOs seem to have lost the rulebook of business.
While raising funds is an important aspect of business, in the bigger scheme of things it’s an insignificant part in the long-term timeline of any business.
It’s rare to find a founder/ founding team today who doesn’t play hop-skip-jump from one VC office to another.
True business is about creating and transferring value through products/ service to the customer in exchange for a profitable transaction.
However, today terms like burn rate, cost of customer acquisition, lifetime value of the customer, unit economics seem to have (unfortunately) overtaken the essence of the business.
Want to know the surest sign that a business may not survive the test of time?
Just look at the schedule of the past 6-12 months of the founder/ CEO.
If they have had more than 10-12 VC meetings, you will know that this may not be a passionate team that’s in business to provide value to the market.
They’re probably just another valuation hungry bunch of people who are masking in the guise of being an entrepreneur.
As a business owner, you’re better off working on your business, growing your brand, investing in the content/ marketing of your business than chasing one investor after another.
If you feel you’re absolutely lost or if you feel you need more clarity with your niche/ positioning/ your personal brand/ your content strategy and would like to consult with me for the same, feel free to reach out to me and let’s connect.Your Thoughts!
If you’ve reached till this point of the post, I’m sure you must have some thoughts/ feelings/ opinions about what you’ve just read.
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Prompt used to create the image for the note
P.S.: Image made on Meta AI using the prompt, “Imagine a startup founder who is struggling to get funding from investors presenting in a boardroom of a vc firm”