Starting a business is a lot like starting a marriage. At first, all parties are in dreamland, with a vision of changing the world, having lots of fun and raking in the profits. But too soon, reality sets in: product development is stuck at that 90 percent mark, a key person leaves, and customers are talking but not buying.
At Shopbox, we identified and are trying to address these challenges. We believe it applies to other startups.
Customer satisfaction is at the heart of the selling process. One estimate is that it costs five times as much to attract new customers as it does to keep an existing one. The relationship between the customer and the organisation is, therefore, an important one.
Funding is a major concern for startups and small businesses. When the economy tanked, it became harder to convince investors and banks to part with the cash that’s essential for growth in the early days of a business. Credit today is tight, and it’s not precisely clear when it will become available.
Twenty-two percent of entrepreneurs mentioned increased competition as a major threat to their success. The solution to this problem? Build a better brand. Credibility often starts with a great website, followed by a good online marketing strategy and media coverage. It is just as important to make sure you clearly communicate why you’re in business–not just what you do. Instead of “We build websites,” go for something more direct and goal-oriented: “We help businesses grow.”
Business projections are not always on an excel sheet. If you can do it right, it’s great but you need to have a realistic expectation of your business. This means to think of the best and a worst-case scenario and prepare for both.
Rapid changes in technology can throw a startup off-kilter. As many tech entrepreneurs know, there’s a lot of pressure to move quickly and beat the competition with a better solution. Making a plan it’s vital, but if you are not able to adapt to constant changes it’s not going to happen as you think it will.
As a new business, partnering with another company in a related field may seem like a great way to grow. However, the stakes are much higher for tech startups, whose operations can easily be ruined by hitching their wagon to a fad. When it comes to choosing which companies to do business with, having clear policies in place, can help you make the best decisions for your startup.
To sum up, startups need people who are crazy for startups, who challenge themselves everyday and who don’t bother for immediate financial benefits. Finding such a fit is certainly not an easy task.
Getting the right people is the biggest challenge a startup has. You are too young to attract the real talent, but you desperately need it to beat the big guys. Time is as critical as money in a startup, and it is important to do enough, to make a little money on the way to the big vision.
— Christian Zigler, founder and CEO, Shopbox