Why Most Startups Fail: The Product
It never ceases to amaze me when startups fail, and the founders are crying in their beers that most of the time, they just didn’t get the fact that no one probably really needed or wanted that thing they were selling.
One of the many major points my dad made with me stuck out. Back when I was thinking about going into the technology business – this was pre-internet days – I was discussing my future career plans with him and told him that I would go into computers. He said, “No, don’t do that. Computers are a fad. You should get into real estate, or even be a barber.” As a young, semi-stupid, know-it-all, I thought to myself, why would I ever want to be a barber? So when I asked why, I got this answer “Everyone needs their hair cut, and everyone needs a house.” So in his way, I realized years later that he was saying, “do something that is always in demand – address a need, not a want.” For the longest time, I thought computers were a need, and now the internet is a need, but the question is – do people need what you are selling?
Since the startup media is so positively focused, it’s usually few and far between when we see a story on the failure of a startup. So typically, the only time that we see that kind of story is when something high profile fails, like HomeJoy. There are plenty of low-profile failures (one of the reasons they may have failed is of course, due to the low profile, so one also must understand that the startup press probably kills more startups simply by not giving them press)
HomeJoy failed for the same reason more startups failed: no one needed what they were selling. This is the tragedy of many [this] for [that] startup – just because it worked for Uber and Airbnb doesn’t mean that it will work for flowers, house cleaning, or anything else. Of course, if they looked at my 5 Ways to Build a Billion Dollar Startup post, they would have realized that they didn’t hit all 5 points, or even most of them – sure, they may have covered point 3, laziness, but were they letting people be helpful, free, combat waste, or go up against an established order? No.
It’s not just startups: it’s EVERYTHING. If you are having trouble selling something, anything, just take a good, long, hard look at the product and say to yourself (you may even need to hire an outside agency to do this for you, as you are probably too invested in the product to do this yourself) do people need this? Is this worth buying? Is this worth the cost we are selling it for?
It’s down to the product, not the salespeople or the marketing people. Even the most talented salespeople can’t sell a turd, so matter how shiny, it’s polished. If the product sucks, then no amount of sales or marketing, or visibility can shift it.