Once startup ideas sparks in someone, it’s hard not to say no to the opportunity. The idea of owning and running a company may seem to be pretty attractive with the hopes of a large income. Get fundings, open the doors, run the business and collect the earnings. Sounds so simple, right?
Well, it’s not as easy as it sounds.
As a founder, you will face a lot of obstacles. However, overcoming these hurdles doesn’t mean your startup is a success but worry not as it puts you on the right road.
We’ve gathered stories from startups who were on the brink of failing but overcame it on their own way. From their own accounts, we hope aspiring startup owners will learn a thing or two when it comes to handling business.
Relating Startup Ideas to Potential Customers
It may sound easy to relay your message to your target market but this is one of the most common things startup ideas fail to deliver.
Ovid Life Settlements aims to reinvent life settlements and make it accessible to the average consumer. This business might be something most of us have never heard of, and this is Ovid’s struggle.
Lingke Wang, Ovid co-founder, says that their biggest challenge in starting out their business was learning to clearly communicate their service to their potential market–in other words, finding that product-market fit. This is because a life settlement is a complex financial product by nature which is not understood by many insurance agents–let alone consumers.
In a nutshell, they help seniors sell their existing life insurance policy to a client for a payout in advance, avoiding loss for the policyholder, who often lets it be terminated.
At the start, Wang shares that the industry relied on life settlement brokers predominantly to handhold consumers through the process but this posed to be rather expensive and inefficient. They did find a solution by means of a software to replace hand-holding and brokering but another problem stood on their way.
“How do you communicate this product online within someone’s attention span?” Wang mentions the complication.
To resolve this communication problem, the company also nailed down its focus to a specific target market: senior citizens. In this way, it is able to resolve the difficulty in disseminating their idea through fine-tuning their pitch to one specific audience.
“We would come up with multiple ways of explaining our service and then test it on our grandparents and their friends, test and repeat,” Wang includes.
This did not only make their pitch more comprehensive but also helped them prioritize information which at the time seemed counterintuitive. Moreover, the findings made way for a library of educational content that guide consumers in every step of the process.
“Today, not only has our content become crucial in converting customers, but is now also helping to drive new traffic and opportunities to our business,” Wang adds.
Attracting Investors Aboard
It might seem like great ideas would attract funding easily but it’s not always the case. This is the truth as well if you are a venture firm taking on new investors. Don’t expect investors to get on board and write a check in your name if you are not able to explain to them how they will make money from their investment.
“One of the toughest challenges I had in the beginning was explaining to investors exactly what we do and how we make money for them,” JP Marony, CEO of alternative investment fund Harbor City Capital Corp, explains.
He further states that it may seem that your business model may sound simple to you but your prospective investors may not understand it the way you do. Therefore you should break your proposal down for them in a manner they understand.
From his experience of starting an alternative investment company, he had to find a method to inform people how they can earn money off their investing.
On the other hand, there are those that opt to self-fund to have the ability to pivot the direction of the company as needed without the hindrance of investors breathing down their necks.
Ultimately, it’s a challenge that many entrepreneurs have to think about on whether to raise funding or provide the money on your own, even if you have interest from a few successful venture capitals.
Attracting Investors Standing out in a Saturated Market
Oversaturation of similar products can often drown out neophyte startups attempting to bring their own product into the market. However, you should not cause a crowded market to stop you from being an entrepreneur.
In fact, Kelly K. Spors on Entrepreneur writes that you ought to just find a competitive edge in order to break through. Startup companies who have discovered a way into saturated marketplaces have done so by standing out from the very beginning.
A good example of this is the wearable technology company GOQii that produces wearable fitness trackers and acquired more than 2.5 million units in 2016. While needing to stand out of the crowd is a great strategy, putting it into action can be harder than you think.
“[Being different] proved to be rather difficult,” GOQii founder, Vishal Gondal imparts, “being the strict space the company operated in. There are many groups in the fitness band industry and many of them are much bigger than we are.”
Nevertheless, Gondal found a way to stand out from the bigger players. GOQii began adding personalized features for a much more economical price which cam from their discovery that people buying wearables were looking for these two things. In doing so, the company was able to seize market share from their competition who were slower in responding to what people are asking for.
Making your startup idea known is just a matter of creativity and oftentimes, just lending an ear to what the consumers want and delivering it to them in order to have a chance in a crowded market.
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