5 Common Mistakes that Startups Make (in App Development) |
Posted: April 19, 2019 |
Every entrepreneur starts his business with many dreams and desires. There are many startups that open and shuts every day. As per the survey conducted by the Institute for Business Value and Oxford Economics, it states that within the very 5 years of inception almost 90% of Indian startups fail. A report published by Forbes is actually very sad which already predicted in the year 2017 that 9 out of 10 Indian startups will fail in 2018. The reason given for this was the lack of innovation. Lack of innovation is definitely the biggest reason for the startup failures, but there are other reasons too. India is considered to be the third largest ecosystem, yet the failure of many startups is really a serious concern. Definitely, there are mistakes that lead to failure. It is necessary to learn from the mistakes so that the same may not happen with you. Every entrepreneur comes up with many dreams and aspirations but failure can put a full stop on everything. Top Reasons for Startup FailureCB Insights has mentioned many reasons for the failure along with the total percentage of failure. The stats show that as far as 42% of startups closed because there was no market need. 29% of startups closed because they ran out of cash. The reason for 23% startup failure was considered to be the scarcity of the right team. 19% failed because they get outcompeted and 18% of the startups faced pricing or funding issued and they closed.
#1 No Market Need:There are many startups that were founded with the zeal but the conceptualization of business leads to failure. Deep market research is required to do any sort of business. Whether the market needs your idea or not this has to be analyzed beforehand. The best example to quote this kind of failure is: Company: Just by Live (This e-commerce platform provided a direct platform to the retailers to buy goods directly from brands.) Funding: $120 million Reason for Failure: Unscalable business model and negative cash flow became the two main reasons for the failure. #2 Ran Out of Cash:Cash crunch has become the reason for the shutdown of many startups. The best example to quote it is: Company: PortDesk (It was a logistics startup that provided e-procurement software for logistics management. Total Funding: $2 million Reason for Shutdown: Cash Infusion has stated as the main reason for the company shut down. However, it raised funding from a Singapore based firm but failed to operate even for a year. #3 Not the Right Team:Whether it is a big business or a small startup team effort means a lot in everything. More than 23% of cases of startup failure were reported because of the scarcity of the right team. For instance, if the technical support team fail in app development then also it can bring a big loss to you and your business. Example of this is below-stated: Company: Wyder (It was a marketplace for the wholesalers. It provided them with the opportunity to customize requirements) Total Funding: Unknown Reason for Shutdown: Although there are no exact reasons mentioned anywhere about the company’s shutdown there are rumors that due to lack of strategy and right team it shut down. #4 Get Outcompeted:This is the reason for the shutdown of many companies. An idea which strikes your mind could be the perfect plan of someone else too. The same happened with many startups. Outcompeting in the industry lead to the failure of many companies. Company: Shotang (It was an e-commerce platform which connected retailers, distributors and manufacturers. Revenue of the company was based on a commission paid by the distributors for every transaction) Total Funding: $6.2 Million Reason for Failure: Tough competition from the top e-commerce sites like Flipkart, Amazon, PayTm Mall, etc. #5 Pricing and Cost Issues:Every business needs some investment. If a good return is guaranteed after a particular period then only it is said to be successful. But, unfortunately, there are only a handful of companies that could maintain the perfect equilibrium. Pricing and cost is another important reason that has made many companies lock their shutters. Price has to be set as per the market standards. Being a startup company, try to earn in the beginning only. Every new business needs to gain trust and high prices won’t give chances to the customer to test the product. Company: Ofo (It was a Chinese company that started its business in India. The company basically dealt with bike rental) Total Funding: Not KnownReason for Failure: The concept was not found appropriate as per the Indian market. Apart from this pricing has also become the reason for brand failure. Technical FailureThis is also amongst the reasons why startups fail. Handling everything by own is not the way of doing business. There are some technical aspects that only experts can look out for. Whether it is web or mobile app development, ignoring it in any ways could be harmful for the startups. It is considered to be the biggest reason for technical failure of many startups. There are many startups that don’t give much weightage to app development and they try to make it on their own. It is always a better option to outsource mobile app development for startups. Reasons for it are mentioned below. Reasons Why Startups Need App Development Company#1 Cost- Effective Solution:Instead of hiring a freelancer for mobile app developer, it is always a better choice to look out for a company. With the experience of company, there are less or no chances of faults. This would ultimately save your money and time, hence, it would prove out to be a cost-effective solution. #2 You Stay the Boss:What do you want to become a jack of all trades and master of none? App development is a part of your business, it is not your business. It is better to have expert to look after the things so that you may concentrate on the other important issues. Outsourcing a mobile app development company would make you the boss so that you can put your ideas and can see it being implemented. #3 Throughout Maintenance and Support:The best part of hiring professionals for app development is that you are promised throughout maintenance and support. They would be there all the time to solve the technical problems. #4 Fast Market Interaction:When there are experts making and maintaining your mobile app then in this case fast market interaction is guaranteed. Their professional approach would let your startup to get fast market interaction. This would ensure that you stay in competition and get what you are actually looking for. Well, these are the reasons why the startups need to hire mobile app developer. Hiring process is not that easy. There are certain set of questions and queries that would aid you in finding the best one for your business. The questions are below-mentioned: Questions Startup Should Ask Mobile App DeveloperQ1) What size of companies you have worked with so far? Q2) Do you have samples of your past work done? Q3) Can I get references of your part clients? Q4) Are you well-versed with my business and its audience? Q5) Are you familiar with the feature I am looking out for in my app? Q6) How you are going to handle app testing? Q7) What is your maintenance and handling policy? When you are hiring a professional to look after the things, it is much more necessary to clear all confusions. The set of questions that are mentioned here would help you in getting the better option for app development. It is necessary to scan the choices that are available. Hiring an experienced company for app development would solve 50% of your technical concerns. Other ReasonsApart from the above-mentioned reasons, there are technical faults too that leads to the shutdown of a startup. I am mentioning the reasons below: - Startups ignoring the technical aspects of businesses. - There are many legal challenges too that leads to startup failure. - With no interest in financer or investors, many new businesses experience downfall. - Geographical expansion failure is also considered as the reason for startup shutdown. - Lack of enthusiasm also resulted in the failure of many startups. Wrapping UpSometimes a few small and ignorable mistakes could lead to big losses and the example mentioned above clearly shows this. Being a startup you need to look out at each and every possible reason that might bring failure. From checking and analyzing the market to find the right team for the business everything is important. Ignoring the technical aspect of any business is not at all a good decision. You should check and verify if you have the right and enthusiastic team to work with you. Ensure you have a good mobile app development company that could take care of the technical requirements. At Credencys we have worked with many startups so far. We promise in delivering quality services as per the business needs.
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