Key Lessons for a New Generation of Thai Startups
It’s easy to find stories about successful startups – even unicorns. While inspiring, these happily-ever-after tales tend to shed little light on the complex decisions that made such achievements possible.
Winners may not realize how close they came to falling off a cliff, but their less fortunate peers can often trace their failures to specific shortcomings. The graveyard of failed startups has plenty of lessons to teach, and the entrepreneurs of today and tomorrow would be wise to pay attention to them.
The dangers are real: Only around half of new startups survive five years or more, and just 40% turn a profit. Moreover, while the rewards for success in IT can be large, that industry is also home to the highest failure rate among startups today. In the current volatile environment, with even well-established businesses nervously hanging on to a teetering economy, the cost of a single misstep could be fatal.
With that in mind, let’s examine some of the most common mistakes made by startups.
- Poor Marketing
If your startup fits an actual market demand, then people need to know about it. Established companies benefit from name recognition, and can often let product quality speak for itself. But if you never make a name for yourself, even your ideal customers may end up finding what they need elsewhere.
A special concern here relates to trust. Simple consumer products, like t-shirts or orange juice, make it easy for consumers to judge quality and take a chance on a new brand. But in tech, where all the magic happens beneath the surface and the cost of choosing a poor product is far higher, companies need to work much harder to convince potential buyers that their investment will be worthwhile.
Failure to inspire trust will almost certainly lead to consumers playing it safe, and continuing with brands they’re already familiar with. We recommend developing a market entry strategy that involves identifying your target audience, determining where and how to reach them effectively, and clearly communicating why your products and services are ideal for their needs.
- Too many assumptions
Many large businesses were unable to handle the pandemic, because they were incapable of making fast adjustments to new conditions. In short, they assumed that 2020 would be similar to 2019 – and that nothing could disrupt the business models which had been working so well for them up to that point.
But unexpected changes occur all the time, from the appearance of new competitors and new technologies, to shifting government regulations, to disruptions in supply chains, to the trend of working from home or shopping online. Compared to their larger counterparts, startups are generally better positioned to change course quickly when the need arises – but only if their leaders maintain an agile mindset.
In this age of disruption, the road ahead is filled with twists and turns. Locking yourself into a single strategy, product, or business model is a recipe for failure.
- Inadequate planning
Entrepreneurs often begin with excellent product or service ideas, but lack the experience needed to plan and execute the business side of the project. Among other things, success depends on setting clear objectives, and continuously tracking progress on your key performance indicators (KPIs).
Your plan should be structured in a way that allows you to easily see whether your efforts remain on track. To this end, we recommend setting sensible business goals that follow the SMART formula. These objectives should be:
Specific
Measurable
Achievable
Relevant
Time-bound
By placing these stepping stones on the path ahead, startups can chart their progress toward the target – and identify problems early enough to correct them with minimal cost.
- Lack of confidence
Many people have observed that only a thin line separates genius from insanity. A great number of entrepreneurs, lacking the experience of the more successful leaders in their field, find that they lose faith in their own ideas after hearing them criticized by people more powerful than themselves.
Admittedly, it is difficult to maintain an accurate perspective surrounding one’s own project. Moreover, most of us are scared to look silly in front of our peers. When the moment of truth arrives, many people decide to ‘play it safe’ rather than take a big risk.
But one of the main reasons to start a new company is to try something that hasn’t been done before. Leaders of established companies succeeded by following older methods, and so they naturally trust those strategies more than new and untested ideas. Listen closely to their arguments, and think them through – but if your ideas seem to make sense even after hearing them criticized, then continue to pursue them and don’t let the naysayers distract you.
Patai Padungtin, CEO of the Thai startup Builk Asia, explains how this approach worked for his business, as he found success only after teaching himself to ignore the skeptical voices around him.
It’s all about the execution
Behind all of the above lessons, of course, is the fundamental requirement of hard work. Steering a startup toward a profitable future will always be difficult, no matter how brilliant the initial idea may be. While the famous stories of unicorns and self-made billionaires are no doubt important, they tend to gloss over the role of grit and resilience that make success possible.
The real path to victory isn’t just about starting with the right idea. It’s about making consistently mature choices along the way, to avoid common pitfalls and give your startup another slight edge every time you make a key decision. Over time, these wise moves can put your company in a better and better position – until one day, you find a new set of entrepreneurs knocking at your door, asking about the secret to your success.
