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Expert tips for startups: Navigating the first five years

Expert tips for startups: Navigating the first five years
Expert tips for startups: Navigating the first five years

The failure rate for new startups is currently 90%. However, some startups find themselves stuck after a few years and do not grow as expected.

What do you do?

Locate2u sat down with renowned e-commerce and marketing strategist Ishneet Kaur. She has successfully built e-commerce and digital business units from the ground up. She’s worked with brands like Lenovo and Johnson & Johnson. She has her own company, ElevateXcellence, which advises companies with specific strategies when they get stuck in a loop and are not growing. 

The first five years

The main obstacle facing startups in the first year is ensuring their product is ‘market fit.’ It’s one thing to be excited about sharing your creativity and ideas with the world, but only a few companies make it beyond the first few years.  

Here’s what Kaur views as important for success in the early years when funding is tough and excitement is overflowing. 

  • Ask yourself, is my product market ready? “Is there a need for the product in the market or not?”

  • Is there capital for this? “So often, many people underestimate the cost or overestimate the revenue.”

  • Do you have a detailed and flexible business plan? “They’ll maneuver the different things that come their way, including market analysis, financial projections, and growth strategies.”

  • Are you building a strong team? “If you have the right people and the right team, who are motivated enough, they’re going to go above and beyond.

  • Do you have the right customer care systems? “Customer feedback and looping that in our growth strategies is very important.”

  • Is there scalability? “Many startups go from 0 to 100 very quickly. But the issue comes in when they do not have scalable systems and processes.”

Kaur has seen many of these problems in the industry. “They scaled up very fast and suddenly came crashing down because of the lack of those systems and processes and couldn’t handle things such as inventory.”

How to spot the warning signs? 

Some startups are proactive by conducting regular “stock-taking” monthly in-depth financial reviews. This makes it easier to see the early signs that adjustments need to be made. 

Here’s how to spot the warning signs to avoid contributing to the 90% startup failure statistic. 

1. Healthy finances

“Whenever I work with startups, I start with financial metrics,” Kaur says it’s the easiest way to see how healthy the company is immediately.

“Even if there are some issues, you will see a trend before a big red warning sign comes in.”

2. Setting goals 

Setting realistic goals for the company and knowing where you and the team are heading is important. “Assess those goals and evaluate where you are with it,” says Kaur, warning that it’s important to keep an eye out for market changes. 

Be critical of your outcomes and look out for the early signs. “Why weren’t you able to achieve it?”

3. Take customer feedback seriously 

“Do we need to pivot? It is a very important word in a start-up ecosystem. Looking at customer feedback,” warns Kaur. 

“A lot of times, we get early signs in the customer feedback in our reviews.”

4. Team performance and morale

Team performance is the engine of the company, and without a motivated team, the output won’t be enough. Kaur believes this is one of the key strategies of a successful startup. 

“I cannot emphasize enough the importance of a team’s morale. Are they enough motivated? Is your team leading?”

5. Financial signs

For more specific warning signs, follow the money. It can even reveal much about operational efficiency. 

“Has your revenue consistently come down. Even if it has stabilized, has your operational cost gone up?”

Tied into the financial expenditure are the marketing efforts. “Are your marketing efforts ineffective or inefficient?”

NOW READ:  ‘Green’ e-commerce in France and Switzerland: Asendia market watch

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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