If you are thinking of starting a startup, 2018 will be a vigorous year. You need to be quite tough to survive. Large tech enterprises have entered the Thai market while Thai startups have begun to acquire significant investments. This means domestic competition will be quite intense.
- Excessive positivity and expectations for quick success and prosperity from many interested investors. In fact, 90% of startups close down in their first year.
- My idea is great and it will disrupt the industry. In fact, an idea is just a piece of paper because anyone can have an idea. Startups need to focus on implementation and make the idea real.
- Inefficient market research – Startups want to begin right away. If the idea is truly innovative, there will be fewer effects. However, often an idea is already someone’s idea or someone’s already doing it. Also, some may have been an idea that was discontinued or is a competitor. An inefficient research will lead to severe consequences. This is a result of ignoring existing case studies.
So, what should you know before becoming a startup in 2018?
- Try best to solve problems and have a large enough target market.
In 2018, startups are not just ideas and execution, that is just the basic fundamentals. Startups need to be executed, otherwise, they can’t pass the first stage. Moreover, businesses need to be in a sufficiently large market in order to grow. This is because a small group of users makes it difficult to survive in the highly competitive market. It can limit business expansion that may finally need to close down. Also, the business model needs to truly solve problems and be the best solution in the market. We can recheck whether our product is the best in the market in the next advice.
- Retention rate is the key.
The most important marketing strategy for startups is no longer burning cash with ads to attract new users. Rather it is continuously developing the product to match consumer needs. A startup will survive or not depends on how long they can maintain the retention rate. It is like pouring water into a bottle, if the product is not good, users will only use them once. This is a bottle with leakages, no matter how much water you pour in (ex. buying ads), the water will leak out of the bottle. Therefore, developing the product to create a retention rate is building a bottle with no leakage, it will create sustainable growth. Startups need to have detailed evaluation tools and need to know “why” users continue to use the product and who they are. This will lead to a precise and targeted development.
- Maintain the momentum.
One common trap is the need for great, quick results. In fact, maintaining efficiency by stating clear objectives (using Google’s OKRs model can provide great results), punctually delivering outcomes, and possessing accurate evaluation systems are more important. Startups should aim for small continuous growth rather than wild, uncontrollable ones.
In 2018, new startups need to ask themselves “have they worked hard enough to achieve great results?” This way of thought helps Startups to see controllable growth via hard work.
To further elaborate, this is an example of the objective on how to convert website viewers to customers at a rate of 10% per week.
Divide into 4 working teams:
- Increase X promotion for those who visit the website for the 2nd time.
- A/B test on the homepage.
- A/B test on the product page.
- Revise content in the product description.
Increasing the work per week to 8 items (from the 4 items above) can create growth opportunity. Also, maintaining this system can make the team strong and acquire sustainable growth.
- Investments are everywhere but will only invest in the best.
Startups are no longer about growth, this year, investors look for truly good businesses with sustainable growth. Such business should be able to create income, be the best in the market, and have genuinely talented owners.
This is because more and more wealthy entities have become startup investors. Thus, startups don’t need to worry about lack of funding. Instead, they should focus on building great products that will influence the society at large. If you and the team are truly great, investors will approach you. This makes it difficult for startups whose initial goal was to solely rely on investor funding.
- Build the best team.
The first battle for startups is not competing in the market, instead, it is stealing the cream of the crop to join your team and retaining them. This is because one talented person who can fit in your firm can replace 15 standard employees. Therefore, building a corporate culture that attracts talents is something to consider from day one.
Startups are not for those looking for quick wealth or have money as the main goal. It is rather a pathway for those who are passionate about creating something that will solve problems (even if it means being broke for a couple of years). If that sounds like you, you are on the right path.