5 Mistakes that can ruin your tech startup and how to fix them

5 Mistakes that can ruin your tech startup and how to fix them
Bucureşti
Bucharest, Romania

Why isn’t anyone buying our product? Why are so many people cancelling their subscription on our platform? Why is everyone sticking to the free plan? Why is our competition doing so much better?

Are some questions you might be asking yourself if your tech startup isn’t doing so well.

Being unrealistic, ignoring customers, not knowing who your customers even should be, treating your team badly are just some of the reasons why your startup is failing.

Launching a startup is no easy feat, of course. But we’ve worked with quite a few startups over the years, and when we see them going down a slippery slope, it’s hard not to say something or offer to help (aside from building their software, which is what they’d hire us for).

So in this article, we’re going to tackle a few common mistakes your tech startup could be making, and how to fix those mistakes so your business doesn’t fail.

Mistake 1: doing bad user research (or the lack thereof)

What’s the use in taking the time to map out and build a piece of software when it might not actually serve anyone? Apps are usually built for particular users, and not knowing who yours are & what they need may set you up for failure.

A good solution to this issue is correctly mapping out your key audience, talking to them, listening to their wishes & advice, and making sure you reach them through efficient communication and brand awareness strategies.

User persona example. Source: https://dribbble.com/shots/24062994-User-Persona-for-hotel-reservation-system-project

The first part of all of this is knowing who your audience actually is. You can create user personas, which are types of people that are likely to use your product. When mapping out your key audience or user personas, look at:

Mapping out a very specific audience helps you create user flows, functionalities, and even branding & marketing materials. You’ll have a clear direction about who you need to build software for.

But just knowing who your target audience is is not enough. Your software will serve this audience, and thus, you need to know what they need and how you could integrate your software into their day to day lives.

Here’s how to talk to your target audience:

Since good software is
- centric, don’t just ask questions for the sake of asking. Truly listen to your users’ concerns, ask
- up questions, and take note of their feedback.

Once you find out more about your users, their day to day life, and their needs, you can map out better user flows and figure out how to integrate your software into their schedule.

Mistake 2: spending too much too soon on scaling up

You’ve just launched, and you already want to add new features? You might want to hold your horses.

When launching a whole new app for the first time, it’s better to wait for people to start using it, to gather feedback and leave reviews before you decide to scale up.

The biggest reason for that? User feedback might be negative. And if you jump onto the next big thing before even getting reviews, you might build on top of features most people don’t even like in the first place.

But user feedback isn’t the only reason why you shouldn’t hurry to scale up. If you’ve just launched, you’ve likely spent the last months spending money on building the app itself. At this point, you should be waiting to get a return on your investment.

It’s risky to invest extra money on adding more features before you get any return - how do you know your ROI will be big enough to cover all costs? You could end up in further debt and needing to pause work longer for profits to come in.

And lastly, do you even need to scale up? Or is your ambition getting the best of you? You’ve finished your launch, so you need to jump on the next big thing? Maybe look into why you feel the need to scale up before you start looking into it.

The solution? Take your time and wait for user feedback to come in, for your app to grow up by itself, and evaluate when you’ve got enough data to analyze how the app is doing. Look at sales, visitors, subscriptions, churn rate, bounce rate (or any relevant stats for your app) over several months before you decide to add new things.

This will help you see what’s lacking and where you can add new features. Customers will have already given their opinions and said what they want. Or, you can send surveys or hold focus groups to ask them directly.

Mistake 3: not caring for your customers

It goes without saying that happy customers are good for your business. They might leave positive reviews, promote your product on their social media, tell their friends & family about it, and thus increase your sales and visibility.

On the other hand, treating your customers with disrespect, lack of transparency or like piggy banks is a PR disaster in the making. Not only could you risk losing sales, but your image could be destroyed forever.

Like we’ve already established, the first way you can show you care for your customers is by factoring them in when building your software. That means building the software for them, and not for your business needs. Because here’s the thing - when you build software for profits, customers tend to see through it. That type of software often neglects user needs and focuses on what gets more profits.

When building software, you’re making it for people to use. You gotta take the time to talk to those people, to get to know them, and to listen to their needs. Their needs will be the basis of what you build.

But we’ve already talked about user research, so let’s go more into detail about ways you might be showing lack of care for customers after you’ve launched.

Here’s how you might be neglecting your customers:

Caring for your customers isn’t actually that difficult. It’s about prioritizing your resources efficiently, listening to their needs and feedback and generally being nice to them. Oftentimes, it just comes down to being a nice person and building a solid relationship with your customers over time.

Mistake 4: building a product no one really needs

Finding a software product niche is great, but is it still a niche when it’s just a few people?

Your software product should serve a group of people, but just mapping out product features and coming up with amazing user flows isn’t enough - do those people and needs even exist?

In other words, before setting out to build a software product, you obviously have to do proper market research. It’s the best way to find out if there are valid reasons for building your product and if there are potential users out there your product can serve.  

Here’s what to look for when doing market research:

Carefully doing market research will be of great help in the long run. If you just decide to build an app without looking into what’s happening in your industry and what your desired users do & need, you might end up building an app no one will use.

The two main goals of your market research, thus, will be finding real, pressing user needs, and whether or not your competitors are already fixing those issues and doing a good job at it. There’s no need competing with an established piece of software if you can’t do a better job, just like there’s no need fixing issues that don’t exist.

One slightly more “evil” approach is inventing a need your intended users don’t really have but you could “exploit”. It’s been done oh so many times already, but it’s relative to what kind of audience you have, so you still have to do some market & user research to get inspiration.

Mistake 5: dysfunctional company culture

Not all tech startup mistakes are from interactions with your customers and industry. Sometimes, the call comes from inside the house. Your employees are tense, your leadership doesn’t get along and struggles to make key decisions, or your team doesn’t work well with one another.

All the advice we gave so far is completely useless if your company culture makes your entire activity slow and inefficient. If your team is unhappy, they won’t feel motivated to do good market & user research. You’ll get unreliable data and build an app not many people will use.

Here are signs your company culture is dysfunctional: