Why Every Entrepreneur Should Stay Prepared to Deal With Start-Up Blows?

Passion, hard work and dedication are not enough for the success of a startup. There are thousand things that can go wrong in a business. Risks and failures are inevitable. This post equips entrepreneurs and founders to concentrate on not just the main plan of the business, but to devise and plan systematic backup alternatives to salvage the business under every cost.

When I was researching ‘why startups fail’, I circled in some of the common problems.

  • Not having enough runway… most startup companies find themselves running short of funds before take off
  • Disputes with co-founder are also some of the most commonly cited reasons
  • Inability to maintain family-life-work balance
  • Underestimating competition, which again is a common factor
  • Using the wrong business model
  • Poor choice of location and niche
  • Not being able to sell their idea

Of course, this list is incomplete, with so many factors leading to success or failure, but the thing that struck me the most about these factors was that these blows needn’t have to be death knells for the company.

Runway too short

The classic ‘runway’ problem is though, not always avoidable but in many cases it is. I have seen too many cases of employees being hired only to be fired (A recent shocking example of Zirtual), moving into plush offices, and CEOs flying out and staying at luxury hotels. These startups could have done well with a financial advisor who would help them make more viable decisions.

Disagreements with partners

The second problem i.e. dispute with co-founders is also a situation that can be dealt without too much bloodshed. For instance, when Meg Hourihan abandoned Pyra labs, Evan Williams did not automatically decide to kill ‘Blogger’. He went on without his partner and later Google acquired Blogger; the rest as we say, is history.

From the difference of opinions to the difference of personalities, there are many reasons co-founders decide to jump ship. However, this doesn’t mean you have to shut down your business. In case, your partner decides to leave, contemplate alternate plans. I don’t mean you should be paranoid about your co-founders leaving you, but it always helps to have a Plan B.

Maintaining work-life balance

Entrepreneurship is exhausting. Some of the reasons startups fail is entrepreneurs cannot handle the high-pressure deadlines, constant travelling and stress. True that as a startup you will have to deal with all these, but that doesn’t mean you cannot achieve work-life balance. For instance, Brad Feld of Foundry Group totally disconnects from the world and goes on a holiday for a week and if it’s doable for him, it should be for you too.

Underestimating competition

The difference between successful and unsuccessful startups is, successful startups thoroughly acknowledge and prepare for competition. Unsuccessful startups think their offerings are unique and beyond comparison and so they don’t have to worry about competition. This can either mean that they are delusional or indolent at best. Some of the biggest startups blow come from your competitors. From Gowalla to 99dresses, so many startups were crowded out by their giant competitors.

Business model

One of the most critical factors determining the success of failure is your business model. From revenue streams to long-term customer value, from KPIs (Key Performance Indicators) to scalable cost structure, startups need to prepare for all these factors as any one of them can lead to a problem.

Poor choices

From a poor choice of employees to a location through to niche, there are many reasons you might face a problem. For instance, a lot of people said that Gowalla failed because it was headquartered in Austin and FourSquare succeeded because it was in New York.

Decide.com failed because it didn’t hire the right people. According to Hsu Ken Ooi, “Our hiring criteria can be summarized with 2 basic questions: (1) Are they great at what they do? (2) Do we like them? Turns out there should’ve been a 3rd question. (3) Do you generally agree with me? We spent a lot of time debating rather than doing.”

Sometimes your entire product line might be wrong. Don’t be afraid to rework on your products. Be open to feedback and willing to rework. Did you know Starbucks started out as espresso makers and Fab.com as a social networking site for gay men? It is okay to change focus midway and find a more profitable idea.

Sell, sell and sell

As an entrepreneur, you are the first salesman your company hires. From selling the idea to your competitors to selling your vision to your employees, you need to sell constantly as an entrepreneur. Everpix lost the battle because they focused only on making their product and not on selling it. Don’t ever make the mistake of thinking, ‘ok my product is made, so my work here is done!’ No matter how great your product, be prepared to sell it over and over again. You would be surprised how many times you would have to repeat your sales pitch over the years.


From hiring the wrong people to exhausting your budget, you would be making a lot of mistakes that can act as speed-breakers. Remember, as a startup founder, you will come across roadblocks at every turn.

‘Running a startup is not a sprint, but a hurdle race.’

So how do you prepare for these blows?

It is not only practical but also smart to prepare for worst-case scenarios. Think of all the possibilities, good and bad – let’s consider a very simple example, a good thing would be to have a lot of traffic on your website but what if your website server can’t handle too much traffic and it crashes? Immediately the situation turns for the worse. Even small problems can act as a deathly blow to your startup if you are not well prepared.

The first thing you do as a startup is to recognize and acknowledge these common problems and find a way around it. If you are lucky, you wouldn’t face any of them, but if not, at least you know how to deal with them.

It is very easy to get emotionally attached with your ideas, partners etc. but at times, you have to look at everything objectively. Smart and workable backup strategies are the safety net for a business and every business must attribute enough importance to them right from the beginning.

So as the old adage goes ‘Hope for the best, but prepare for the worst’.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *