15 reasons why a business idea fails

After more than 20 years as an entrepreneur, if there’s one thing I’ve seen, it’s a failure. Own and foreign. I know it’s not okay to say those things when everyone else talks about success all the time, but the truth is that entrepreneurship is a game with an 80% -90% chance that it will not turn out well.

Ignoring what is most likely is crazy and whoever says they have not had their good dose of failure is either lying to us or not taking too long on this.

The positive part is that, with time and experience, you learn to identify the signs of a company or business idea that is going to fail.

And the most common are these.

1. You are not marketing from the start

If you are in the idea phase, and you are not already promoting it in some way: talking to people, making contacts, and preparing how you are going to get your first clients, a bad sign that can indicate a probable failure.

Many work hard, leave the perfect product, spend months getting everything ready, from the office to the web, and when they go to market, they realize that there is no one who wants to buy what they make.

So much effort for nothing.

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If we promote from the beginning, we get:

• Calibrate the true interest in the product(something so fundamental that it is not the only time it will appear here).
• Do not start from scratch trying to get customers at the most vulnerable moment of a company, but start with traction and momentum.

1. You have nothing different

This is the reality of most businesses.

The problem is not that many entrepreneurs do not know that you have to be different, the problem is that there is a significant self-deception about it.

You think you are offering something new, when in reality you are almost identical to the one next door, selling the same thing at a similar price, or just a little lower.

1. You don’t do anything that really creates urgency or solves a problem

This is not the same as not being different. You can do something different from the others, which will not help if the client does not care.

There is a gulf of difference between applause and payment.

I’ve talked to dozens of entrepreneurs who have always complained about the same thing: “I don’t understand why everyone tells me it’s a good idea, but then nobody buys it.”

A “good” idea is useless. Something that is “fine” only gets people to tell you that it is “fine” in a polite way, but we only scratch our pockets for what:

• Urge us.
• It solves a big problem in a way that is superior to the alternatives on the market.
• Inspire a desire so great that it surpasses us.

A “good” idea or a “not bad” product is useless.

1. You don’t act based on data, only on opinions

And acting based on opinions is the shortest path to failure in business.

The opinions of those around us and who appreciate us are especially useless. I’m sorry, but it’s like that. Many will try not to break our dreams and our ego, they will give us lukewarm answers and moderate encouragement. Or they simply do not know what they are seeing and say that it is good for them to avoid looking bad.

But they are not our audience. They are also not experts in what we are going to do and, contrary to what some people think, not all opinions have the same value.

If I were going to have heart surgery, I wouldn’t think that the opinion of an excellent cardiologist and a friend from the bar have equal weight when deciding how to do it.

In fact, in business, even the opinions of experts are of almost zero value.

The data is the important thing.

That’s why the main thing is to test the idea and receive real market data as soon as possible :

• Do people join our mailing list to get more information?
• Are we getting enrolled in the presale?
• Are we getting real feedback?

Of course, data does not mean copying and pasting a consultancy industry study into our business plan. Needless to say, this is as useless as the opinion of those who pass by on the street.

1. You try to do it all

And it is impossible. A company has all kinds of obligations and areas that need to be in place for it to function well. Many of them are administrative or maintenance and do not provide sales, but they are necessary.

The entrepreneur who is a salesperson, computer scientist, accountant, administrative worker and a thousand things at the same time is not excellent at any. And what’s worse, he ends up exhausted and burned out .

80% of the time should be dedicated to the 2 most important activities:

1. You have not thought well about money

Many entrepreneurs are not clear about their business model, which is the technical term for how you are going to make money with your company.

Focusing on building an audience, but not knowing how to monetize it, or believing that this is “the easy part” is cheating. There is nothing more common than companies with a large audience that cannot extract a penny.

Similarly, business models must be robust and proven. Many believe that they are going to make money with frankly Martian schemes that are not founded on anything.

On top of that, I have come across a huge number of entrepreneurs who hadn’t even done the most basic accounts of their business. They had not calibrated well the enormous amount of sales necessary to subsist, for example.

1. You only care about money

And not the clients and give them all the possible value.

The reality is that money is the natural consequence of providing tremendous value.

But for that, the client must matter to us.

It is very sad, but that does not happen in many entrepreneurs. They don’t really want to make anyone’s life easier and didn’t start with that in mind, they just see an opportunity to get rich.

For them, customers are numbers and the goal is to separate them from their money, not to leave them in a better place than where they found them.

Those companies are doomed to fail.

1. You don’t care about money

It is the other side of the coin and I know that there is a lot of talk about money in these reasons for failure to undertake, but without money, there is no company. After all, we are not creating an NGO.

Those companies that have a laudable purpose, but cannot or do not know how to monetize it, will close soon.

All hobbies or altruistic initiatives have other ways of being carried out. I have created many of those projects and they are great, but they are not business.

1. You have no idea where you are getting into

Many entrepreneurs, especially solo entrepreneurs, are very good at what they do. So one day they decide to get on their own, to eliminate that unbearable boss from the equation.

But running a business goes way beyond being good at what you do.

You will have to know many more things and, probably, surround yourself with good people in all that: marketing, management, personal productivity, logistics …

Being the best plumber in the world is not the same as having the best plumbing company in the world.

Running a business is not easy and many do not know what they are getting into.

1. You are following a trend

Now it’s cryptocurrencies, now real estate, now masks … You are not in business to add value or because you want to solve problems, you just want to take advantage of the speeding train.

The reality is that, if you are thinking about it, it is surely too late and it will overwhelm you.

This reason for failure when it comes to entrepreneurship is usually a combination of several that we have seen: you have no idea where you are getting into, you just want the money, etc.

1. You can’t build a story around your idea

Let’s imagine for a second a company like the one in the previous point. You want to get into business just because it’s hot and you see an opportunity to make a quick buck.

Doesn’t sound very good as a story, does it?

Anyone who hears it, or is unable to pick up another when looking at that business, will not be particularly impressed, to put it diplomatically.

What’s more, that kind of story produces the opposite of what we want, an unreliable image.

To many people this point seems something esoteric because they do not understand that history is the most important thing in marketing and will permeate everything that is done in that being, being the main foundation to be able to build a brand.

What is the origin of the business idea? Why was it born and with what motivations?

Those are the foundations of a good story that we will develop over time and activity.

Marketing is usually the main problem for most companies and not having a story is not having the fundamental foundation on which to build your marketing.

1. You have the wrong market

The most important thing for a company to be successful is to choose the market well and it has:

• An active demand.
• A size is sufficient.
• A wish for our focus.
• That we can access those clients.

No matter how good they are, typewriters are no longer sold today and many businesses are trying to sell typewriters or just trying to sell to people who don’t buy.

1. You are trying to change the market and its habits

Many companies believe that they are like Apple, capable of changing the market and its buying habits and desire.

But the market is like a sea and we are a ship. The ship cannot change the sea and I’m sorry, but we are not Apple.

So we will have no luck trying to change the habits of the market and, if the success of the business depends on that, we can prepare ourselves for failure.

1. You are working on more than 1 thing at a time

Every entrepreneur has a thousand ideas in his head that attract and excite him. When she starts working on one, she crosses another that looks more attractive and goes after her.

The new is always more interesting because in our head everything is easier when we think about it and in reality, everything is more difficult when we do it.

To this is added that many entrepreneurs do not understand well the advice that you have to diversify and, again, what they do is spread little effort among too many things.

With that, you do not create an impact on any, or worse, you have 7 things, yes, but all half and none finished.

Focus like a laser on what is important, finish what you start, and get the product on the market as soon as possible.

We all think of ourselves as “good” in the idea phase, but the best get things done.

1. There is no mass action approach

The reality is that to avoid all of the above, a massive action approach is required.

I want to put the emphasis on massive because today everything is going faster than ever and there is more competition than ever.

We underestimate the amount of action necessary to achieve our goals.

It is normal, we are people, we have that small cognitive defect. For this reason, the best are very inclined to action, not to think, to plan over and over again, to keep thinking, to ask for another opinion …

While we do that, the initiatives that do not fail have already taken to the water and have crossed half the pool.

If so, we will have to run to reach them.

These are not the only reasons why a business idea fails, but the truth is that they are the 15 that I have seen the most repeated in all these years.

By avoiding stepping on these mines, we are likely to reach our goal.

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