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    NooB Monday! - (August 10, 2020) Entrepreneur

    August 10, 2020

    NooB Monday! - (August 10, 2020) Entrepreneur

    NooB Monday! - (August 10, 2020)

    Posted: 10 Aug 2020 06:12 AM PDT

    If you don't have enough comment karma here's where we can help.

    Everyone starts somewhere and to post in /r/Entrepreneur this is the best place. Subscribers please understand these are new posters and not familiar with our sub. Newcomers welcome! Be sure to vote on things that help you. Search the sub a bit before you post. The answers may already be here.

    Since this thread can fill up quickly, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

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    {Thread} Over 25 Battle Tested User Onboarding Tools to GROW your business. What Am I Missing? ��

    Posted: 10 Aug 2020 12:32 PM PDT

    As an early-stage growth consultant, I make over $300k a year building user onboarding funnels for Silicon Valley tech startups. I've battle-tested hundreds of tools in the last 5 years and managed to compile a list of best-of-breed User Onboarding solutions that most marketers don't even know exist.

    Some of my favorites below. What are you using?

    My Current Top 3:

    Scribe - https://cursive.io/scribe

    • Ever heard of Concierge customer support? How about precision query resolution? This tool will reduce the time your customer support team spends on solving product related queries by 90%.

    Feedier - https://feedier.com/

    • Think Qualaroo on psilocybin mushrooms and steroids. Being able to seemingly gamify and incentivize onsite customer feedback without adding another layer of product churn into the mix has been extremely valuable for me.

    Userflow - https://getuserflow.com/

    • IMO they're currently the best bang-for-buck product walk-through solution out there.

    Other favorites:

    Product Walkthrough

    Behavioral Analytics & Cohort Analysis

    Livechat & Chatbots

    Email Marketing

    User authentication/SSO

    Experiment tracking

    Nudging (Social Proof, Fomo, etc.)

    A/B Testing

    Data Enrichment

    Hope you enjoyed the list.

    Did I miss anything?

    Feel free to add recommendations in the comments*.*

    submitted by /u/Andyjenk_
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    I will design your website or app for free

    Posted: 10 Aug 2020 05:59 AM PDT

    Hi everyone!

    I'm currently a freelancer in marketing, graphic design, and web development. I've always built websites without going through the process of UI/UX design. Since I'm looking to make an official transition to become a UI/UX designer, I need to create a product from scratch. I'm looking to add to my portfolio and taking in any requests to design your website/app idea or redesign your existing one.

    Just to be clear; I will not be developing the website or app. I will create the wireframes, mockup, and a visual prototype.

    Preferably looking for simple, yet intuitive ideas. Not looking to create a copy Uber or Airbnb. I would like to go through the brainstorming process with you and get your feedback through each milestone.

    Please DM me so we can get in contact. I can possibly only take 1-2 projects and will attempt to complete it within 7 days.

    Thank you!

    submitted by /u/UneeqUzernaym
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    Weekday Nugget - Don't Try To Do Too Much, Too Early

    Posted: 10 Aug 2020 11:23 AM PDT

    Over the past 10 years, I've tried many businesses. Some have worked, some haven't.

    But I have sold four, so I think my words have some weight nowadays.

    I've learned a lot, and this sub could always use value, so I'll be posting about some of the random gems I've learned over the year that made my life easier.

    The first is to try not to be the jack of all trades when starting your company.

    I can see exactly how and why it happens---you have gotten as far as building out your initial version of your product or service, and you've started to look for your first few clients.

    You have a set of things you offer, but Prospect A asks if you can do this one thing that's slightly outside of the scope of your offering.

    You think to yourself...well that shouldn't be too hard to do, and I could really use the revenue right now.

    Well, usually that approach will not work out for you. Why?

    Because all revenue isn't good revenue.

    Usually, when people start companies, they select what they are going to do based on what makes sense for their skillset, their research, or by following some model they've seen before that works. While there are times (plenty, in fact) where a pivot makes sense, the first and primary goal of your company should be to lock in on one or a few things that your company can be good at---and excel at those things.

    You WILL lose out on potential revenue upfront, but with focus, your company will end up in a better place.

    Why? In most cases, we are entering into competitive markets.

    Most of you are working on software, digital marketing, business services or local businesses, and in order to have staying power in your business you need to do a decent job at what you're offering.

    When I had my digital marketing agency, for example, we started off doing ONLY facebook ads management. That's it. It was hard enough to get that right, and you can build a sizable company doing it.

    It's a pretty simple concept, but the allure of revenue is very enticing and even experienced entrepreneurs fall into the trap of chasing the first dollar instead of the best dollar.

    The jack of all trades will likely fail....work on a few things first, do that well, then (maybe) expand your toolset.

    submitted by /u/SpadoCochi
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    #002: How These 7 Words Sold $70 Million of ONE Course

    Posted: 10 Aug 2020 06:17 AM PDT

    Image of 7 Words

    In 1919, Sherwin Cody began selling his patented 100% Self Correcting Course in English Language. In the next 4 decades, this ONE course made over $4.5MM in sales.

    It sold 150,000 copies that we know of. Each copy was $30 each.

    In today's money, that converts to about $70,368,746.79. Over a 40 year run, that averages out to:

    • Nearly $1.8MM a year
    • Nearly $150k a month
    • Nearly $5,000 a day

    Basically, in the time it took you to read up to this sentence, Sherwin Cody had a little over $1.50 in sales. Times 40 years.

    And this was achieved with ONE ad.

    An ad that did not change in the 40 years it ran.

    An ad that even the greatest mail-order copywriter of all time, Victor O. Schwab (1898-1980, not me folks), couldn't beat.

    No ad ever did.

    This undefeated streak only ran for 40 years because Sherwin Cody himself didn't live longer.

    In this post, I'm going to share with you how he did it. I'm going to show you the exact ad he used. And I will give you lessons you can apply to your own business and ads.

    Orphaned At 12

    Alphaeus Sherwin Cody was born in 1868 near Grand Rapids, Michigan. He was born to Aldus and Eliza, a couple that owned a sawmill and lived in a cabin.

    Both of his parents had some college education, and had aspirations for their Cody and his 3 younger brothers to be educated.

    At 10 years old, Cody lost his father to tuberculosis.

    At 12 years old, Cody lost his mother to illness.

    Their deaths wounded him deeply. It created a strong desire in Cody to become educated as his parents wished for him.

    Cody lived with his maternal grandmother up until he went to college. In that time, he studied Latin and learned Greek. He excelled in mathematics. He started a debate society. And generally did well in school.

    In college, he was broke. He had $105 when Amherst College cost $319 per year, so he took up work to make up the difference.

    The college president hired him as his personal secretary. Cody borrowed money from his uncle to buy a typewriter.

    That typewriter became his first try at business. He offered classmates copies of professor's notes at 75 cents and made $25 (about $600 today). He copied a play for a nearby girls' school and made $11 (about $300 today).

    Then comes a long career. Journalism. Publishing. Writing novels and instructional books. And adult education.

    Here are the most important bits:

    • In selling his own books, Cody learned some principles of writing ads.
    • At the Chicago Tribune, he created an English course. This course later became a book called The Art of Writing and Speaking The English Language.
    • Cody made a correspondence course called The Cody System. This taught him a lot about correspondence courses.
    • During the Gary Plan, he got the chance to pilot a grammar curriculum for about 1,000 students. In 5 weeks, there was a 40-50% reduction in mistakes.

    After his experience in the Gary Plan, he thought of creating a new teach-yourself course.

    From selling his own books, Cody learned something important. He knew that literary writing and sales writing were two different things.

    He wanted to work with an advertiser focused on results, not pretty words. So he found a firm that specialized in mail order advertising.

    He went to Ruthrauff & Ryan Advertising.

    Hi, I'm Maxwell Sackheim

    At R&R, Cody spoke to a few copywriters. They were all very impatient with him and thought he talked funny. So they all ignored him.

    All but one.

    Maxwell Sackheim.

    Max listened to Cody without judgement. He encouraged Cody to finish the course and patent the method. He even helped in making the course and planning the strategy.

    But even with all his contributions, Maxwell Sackheim did something legendary.

    He wrote these 7 words.

    Do You Make These Mistakes In English?

    It is difficult to exaggerate the genius in this headline. This headline is to advertising what e=mc2 is to physics.

    There's a man named Victor O. Schwab. His advertising firm inherited this ad from R&R. Like many ad firms, they kept testing new ads to try beat old ads.

    Many people consider Schwab the greatest mail-order advertiser of all time. He worked together with Sackheim to find any words that could beat this headline.

    In 1939, a full 20 years after the original headline, Schwab wrote an article that basically admitted defeat. The article is "The Advertisement That Is Never Changed" from a 1939 release of Printer's Ink Monthly. And in it, he compares it with his second best ad.

    The full article is locked in the University of California library. This is what I could find:

    "Do You Make These Mistakes In English?" ran in 374 ads. It brought 224,025 inquiries and 10,962 orders. This is $328,000 in sales.

    "How To Speak and Write Masterly English" ran 251 ads. It brought 52,304 inquiries and 3,861 orders. This is $115,830 in sales.

    Ad for ad, "Do You Make These Mistakes In English?" brought triple the inquiries and double the sales of the next best headline.

    Let's break it down.

    (By the way, in the time it took you to read up to here, Cody got $15 in sales. For 40 years.)

    The Full Ad

    Image of Full Ad

    The Strategy

    In its entire run, this ad was only run a few times a year.

    In the 1920s and 1930s, that was 5-9 times a year.

    In the 1940s, that reduced to 3 times a year.

    In the 1950s, that dropped again to twice a year. Usually in August and December as schools started.

    The Design

    Remember that this ad looked the same way in all 40 years of its run.

    Even as printing technology improved, this ad stayed exactly the same.

    Why?

    First, if it ain't broke, don't fix it.

    Especially when it makes millions of dollars.

    Second, Cody wanted this ad to remain as basic as possible so it could be printed anywhere.

    And he did just that.

    Newspapers. Magazines. Comics. Annuals. Pulps.

    If anyone could print anything, he wanted them to be able to print his ad.

    The Headline

    First, it uses the magic word 'You.' This word is powerful. There are thousands of articles out there telling you to use "you" more than "I."

    Everyone's mind is "me, me, me." Any time you use the word "you", you are joining that conversation.

    This is why you can yell, "Hey, you!" in a crowd and A LOT of people will turn around. You just interrupted the conversation: "me, me, me, me–Who, me?"

    Second, it puts you on the spot. Nobody likes to make mistakes. And even more, nobody wants to make mistakes and not know about.

    It makes sense. A million years ago, a mistake would mean:

    • Eating something poisonous
    • Getting eaten by a wild animal
    • Getting murdered by someone you offended

    In other words, mistakes meant death or bodily harm. The stakes are much lower these days, but that part of our brain remains.

    Third, it says 'these mistakes.' The key is in the word 'these.' What happens when we take out that word?

    If you're NOT confident in your English, you'll read the ad.

    If you ARE confident in your English, you won't.

    But when we say these mistakes…

    Even the most confident English speaker is curious to know what mistakes the ad will point out.

    Regardless, it pulls someone into reading more.

    The Sub-Heading

    It mentions the product: 'Sherwin Cody's remarkable invention…'

    It gives social proof: 'more than 100,000 people'

    It promises to be easy: 'only 15 minutes a day'

    It repeats the same benefit twice:

    • 'correct their mistakes in English'
    • 'improve your speech and writing'

    Opening Paragraph

    Notice the ad isn't a bullet list. The mistakes are written in sentence starting with:

    • 'Many persons'
    • 'Still others'
    • 'It is astonishing how often'
    • 'Few know'

    And then the last two sentences are just blanket criticisms of 'most persons.'

    "Does that include me?"

    Blame and Authority

    The next two sections are all about blame and authority.

    If you have made the mistakes he listed, you are probably feeling a little insecure. Remember, nobody likes making mistakes.

    But that is a bit of problem. Your prospect is feeling bad. You need to put him at ease.

    What does Sackheim do here?

    He gives the prospect someone to blame: schools. And this is double brilliant because where would someone go to learn English?

    Yup, school.

    These sections also build up Cody as an authority. At the time, the Gary System of Education was a major school reform. So the name adds credibility to Cody.

    It also mentions the results he achieved.

    You come out the other side thinking, "It's not my fault, but this guy can fix it."

    Easy and Fast

    The next section is a very interesting use of imagination.

    This patented 100% Self-Correcting Device isn't just a book or course. It is Cody himself.

    Standing beside you. Quietly. Patiently. Respectfully.

    Always ready to guide you as you go about your day.

    And the next section tells you that it only takes 15 minutes a day. Just in case you are skeptical, it also explains why it will only take so little time:

    • 69 words make up half of our daily language so focusing on these fixes a lot of the problem.
    • Less than 12 principles to learn punctuation.
    • 25 grammar mistakes that cause 90% of everyday mistakes

    Those 15 minutes will also NOT be boring but 'fascinating practice.'

    And he goes even further to tell you when you can take those 15 minutes:

    • Riding to work
    • At home.
    • From 'profitless' reading or amusement.

    A Barrage of Benefits

    Before his offer, he just hits you with benefit after benefit after benefit.

    He isn't offering you English. He is offering you what good English will get you:

    • 'something so priceless it cannot be measured in terms of money'
    • 'mark of breeding that cannot be erased'
    • 'a facility in speech that marks them as educated people in whatever society they find themselves'
    • 'self-confidence'
    • 'self-respect'
    • It will be useful in the 'race of success'

    The Offer

    This is ye olde version of 'To learn more…'

    There is a lot of repetition for emphasis here.

    Free is mentioned three times:

    • 'FREE – Book'
    • '… had by anyone, free at request'
    • '… no obligation'

    It makes the offer for the book twice.

    And then we have boilerplate instructions, address, and coupon.

    The Free Book and Product

    The free book and course itself goes beyond the scope of this post.

    If you want to learn more, Edwin L. Battistella wrote the book on it. Do You Make These Mistakes In English? The Story of Sherwin Cody's Famous Language School by Edwin L. Battistella.

    You can also find used copies of the course on Amazon.

    The Testimonials

    I have zero doubt in my mind that Cody received hundreds, if not thousands, of testimonials. If you have that many testimonials, there must be a lot of meaning to the 4 testimonials featured.

    • The first testimonial is an example of professional advancement.

    • The second testimonial shows it is interesting and beneficial for someone in secretarial work.

    • The third is about confidence in writing letters.

    • The fourth is about social insecurity.

    In other words, this product will help:

    • an ambitious person,
    • a working person, and
    • people skills, in long-distance or in person.

    And it will do so for both men and women.

    Key Takeaways

    In your business…

    • Writing builds authority. Cody's opportunity in the Gary Plan was from writing. And he wrote A LOT about English. That opportunity gave him the immense credibility he commanded in his ads. Take what you know and write about it. You never know who will read it and what doors it will open for you.

    • Write what you know—so go out and know something. A quote from Cody himself. If you don't know what to write about, go read. Go do. And keep reading and doing until you know.

    • It only takes one. It only took one conversation to keep Cody in college. One meeting to get involved in the Gary Plan. One meeting in an office to meet Maxheim. But it takes time and sweat to get that one.

    In your copy…

    • 'You' is the most powerful word you have. This is the single most powerful way you have to get in your prospect's mind and hold your prospect's attention. 'You' is how you enter the "me, me, me" conversation. This article uses the word 'you' about 80 times.
    • Your headline is the most important thing in your copy. About 80 cents of every dollar your ad sells is in the headline. When writing copy, I spend DAYS just working on a headline. A great headline can save bad copy. Great copy can't save a bad headline. For anything you write, those 5-15 words at top should take as much time as all the words that come after.
    • Position your product differently. This ad isn't for a course. It is for having an expert such as Cody metaphorically standing beside you to teach you. Easy example: Your workout app isn't a workout app. It's a personal trainer in your prospect's pocket.
    • If your product is expensive, don't directly go for the sale. Cody didn't ask for what is now $700+ in a single ad. He offered a free booklet that explained the course while offering value. And the time between reading the ad and getting the book for you to think about it. The more expensive a product, the more trust you need to build to earn a sale. Even with Cody's credibility, he still offered a free booklet. Think about how you can offer value for free to your prospects.

    P.S – By the time you get to this sentence, Cody had about $35 in sales. For 40 years.

    What's up, guys? Victor from Unfaircopy.com here.

    This is the second post in a weekly series where I break down some of the most successful ads in history. In each breakdown, you will get 3 things:

    1. You will learn the business decisions that led up to it.
    2. You will learn the exact words and psychology that made the ad successful.
    3. You will get actionable takeaways to improve your business and your copy.

    My previous post was How This Ad Sold 425 Million Camel Cigarettes covering the first ever viral ad campaign and success of Camel's 1913 launch. [Reddit Link] [Site Link].

    Why?

    To be transparent, I want to get my name out there and to earn the trust to hire me as a copywriter. And I want to give some value upfront first.

    My previous post was received so positively that I just had to make a second post.

    Hope I lived up to the expectations from the previous post. :)

    submitted by /u/AskACopywriter
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    Startup Failure Rates: my personal experience + research on the topic

    Posted: 10 Aug 2020 09:34 AM PDT

    Yo. After my 5 Lessons from 2 Failed Startups post here on r/Entrepreneur I got in touch with the guys from the failory.com website. Since failing at startups seems to be my area of expertise and the premise of their site is learning from entrepreneurial mistakes, it seemed like a great fit to make some content together.

    So, I got to write this quite extensive piece on startup failure rates - why they are so high and why it's important to distinguish between true startups and more traditional new businesses when talking about risk. I think it's an important topic for anyone looking to become a startup founder, so I hope I did it justice and that you guys will find it useful!

    As per r/Entrepreneur rules, I'm copying the whole content of the article here. At the bottom, I'll post the link which includes a pretty infographic and some other visualisations.

    ---

    Startup Failure Rate: Ultimate Report + Infographic [2020]

    • 9 out of 10 startups fail (source: Startup Genome - the 2019 report claims 11 out of 12 fail).
    • 7.5 out of 10 venture-backed startups fail (source: Shikhar Ghosh).
    • 2 out of 10 new businesses fail in the first year of operations (source: Bureau of Labor).

    These are some of the most common statements on the topic of startup failure. While those stats could certainly be helpful, if you put them in the wrong context, they could also be misleading.

    In this article, we'll try to go to the source of the data as well as Failory's unique experience of talking directly to hundreds of successful and failed startup founders to shed light on the question of startup failure.

    INFOGRAPHIC

    What is a startup and why is it prone to failure?

    In its broadest sense, it is a new business in its earliest stages of development.

    This definition is too general, however, and as a result - misleading. A new hairdresser salon is also a new business in its early developmental stages, but most people in the startup community would tell you a hairdresser salon isn't a startup.

    A startup usually has two important characteristics:

    • Innovation: A startup is testing assumptions that haven't been tested before – sufficiently new technologies, products & services, or markets.
    • Growth: A startup has the potential to grow exponentially rather than linearly. It is scalable. This usually happens because technology provides leverage (usually, a marginal cost of production close to 0).

    So, a startup is in essence a business experiment with potential. This means that real startups are prone to failure by definition. They are testing assumptions, and it's very likely these assumptions are wrong. The more innovative the startup, the riskier the assumptions it's testing, the more likely it is to fail.

    When you put this new kind of risk on top of the traditional risks of starting a business (finance/cash flow risks, operational risks, team risks, marketing risks, etc.), it's no surprise most startups fail.

    Example: New Startup vs Non-startup Projects

    Imagine you have a new IT consultancy that builds software for your clients. Even though you are a new business and you work with technology, you are not a startup because:

    1. You are not innovative by definition. You're providing the same service other IT consultancies all over the world are providing.
    2. You can grow linearly – you are getting paid per hour, so growth would require you to hire new developers, which would increase your costs at a similar rate to your revenues.

    One day, you notice that all your clients have a similar problem, so you decide to invest some time in developing your own software product aimed at solving that problem.

    This is a startup project, because:

    1. It's innovative – it is solving a problem in a new way (your software solution).
    2. It's scalable – gaining new users of the software doesn't increase the costs of running the software linearly.

    The likelihood of your consultancy business failing is lower than the likelihood of your new software product failing because the software project is still trying to find product-market fit. Once validated, however, the software project could have bigger returns because of its potential for exponential growth through leveraging technology instead of human capital.

    Startup Failure Rates:

    So, when you talk about startup failure rates, it's important to understand one thing:

    • Are you talking about the failure rates of new businesses in general?
    • Or are you only talking about the failure rates of innovative and scalable business ideas?

    Failure rates of all new businesses:

    Statistical sources coming from government institutions are largely concerned with the failure rate of new businesses as a whole. This is useful if your project is closer to a traditional business. In this case, your baseline failure rate would be lower than 90%. One of the most quoted statistics, in this case, is the Business Employment Dynamics report coming from the Bureau of Labor:

    • 20% failure rate until the end of the 1st year
    • 30% failure rate until the end of the 2nd year
    • 50% failure rate until the end of the 5th year
    • 70% failure rate until the end of the 10th year

    Most new registered businesses aren't true startups, so you shouldn't assume your likelihood to fail in the 1st year is only 20% if you're trying to do something innovative.

    N.B. Some articles out there are quoting those statistics in the context of startups, which is misleading, so be careful!

    Failure rates of scale-ups:

    Statistics coming from Venture Capital funds are mostly concerned with real, innovative, scalable startups. However, venture funds invest mostly in growth-stage startups, AKA scale-ups. They are true startups, but most of them have gotten past one of the biggest risks for startups: the search for product-market fit. They have tangible proof that people want what they are offering (this proof is how they attract venture capital).

    This means that their failure rates would be lower than the failure rate of early-stage startups. Harvard Business School lecturer Shikhar Ghosh says in a WSJ article that 75% of venture-backed companies never return cash to investors and in 30-40% of the cases investors lose their whole initial investment (he works with a dataset of 2000 venture-backed startups).

    That said, only 0.05% of startups get VC funding (Source: Fundable), so this statistic is not applicable for the vast majority of new businesses, especially if they are in the early idea stage.

    Failure rates of all startups:

    Early-stage (idea stage) startups, of course, bear the highest risk and have the highest failure rates. It's hard to claim accuracy about failure rate statistics for those kinds of projects because a large chunk fly below the radar. They don't raise capital from funds or other entities who maintain a dataset - most early-stage businesses are funded from the founders, their family, and friends. A large chunk of early-stage startup projects don't even register a legal entity – you don't need one to test an assumption. You need one once you start making money.

    The regularly quoted number is that 9 out of 10 startups fail, and it seems to originate from the Startup Genome project (in some of their more recent reports, however, they even say only 1 in 12 entrepreneurs succeed).

    The exact accuracy of the statistic is beside the point for most people. The fact remains that startups are extremely risky, as can clearly be seen by our growing collection of interviews with failed startups founders as well as our Startup Cemetery, but equally rewarding, as can be seen in our startup success story interviews.

    Failure rate implications for startup investors

    So why can investing in startups be profitable even with the abysmal failure rate?

    It's because the successful startups make up for the unsuccessful ones.

    If a startup fund has a portfolio of 100 companies, most of its returns would come from the 1 biggest success (ideally, a unicorn), followed by the 9 successful-but-not-huge companies. The 10 successful startups more than compensate for the 90 failures.

    The implication here is that startup investors are searching for the home-run, and are willing to lose money on most of their investments to find that company. This means that as a founder, you're unlikely to get funding from startup angels and VCs if you don't show a lot of ambition and scalability.

    This doesn't necessarily mean that your idea isn't worth pursuing if it doesn't fit the investment criteria of VCs. Being a successful founder of a lifestyle business is way better than being an unsuccessful founder of a traditional go huge or go home startup.

    Failure rate implications for entrepreneurs

    If you're doing anything remotely innovative, you need to accept the fact that you are very likely to be wrong. The world is very complex, most ideas (and the assumptions they carry) turn out to be bad.

    That said, simply accepting that you have a 90% chance to fail doesn't seem like a healthy mentality. There are plenty of ways you can maximize your chances of success. The fact that the average is 90% doesn't mean you can't nudge this number in your favor.

    Some of the concepts that would help you the most:

    For idea-stage startups:

    You are searching for a product-market fit. The principles of the Lean Startup are extremely important at this stage. The goal is to validate your assumptions as quickly and cheaply as possible and to give yourself time to pivot if necessary. Get a good grasp of the meaning of MVP, validation experiments, validated learning. Get used to the agile project management principles when you are in the process of building. Learn to prioritize and change your priorities based on customer feedback.

    Here are some findings from the Startup Genome Project:

    • Startups need 2-3 longer to validate their market than most founders expect. (The implication here is that cashflow/availability problems can kill the project before you were able to properly test the waters.)
    • Founders overestimate the value of the intellectual property before product-market fit by 255%.
    • Startups that pivot 1-2 times have 3.6x better user growth and raise 2.5x more money. Startups that pivot 0 times or more than 2 times do considerably worse. (The implication is that it is prudent to secure sufficient time and resources to attempt up to two pivots.)

    For later-stage startups:

    One of the biggest traps is premature scaling. It means over-investment of resources (in the broadest sense) too early in the startup journey. The Startup Genome Project breaks the startup stages in four: Discovery, Validation, Efficiency, Scale. It calls startups that scale prematurely inconsistent. Here are some examples of their findings:

    • Inconsistent startups write 3.4x more code in their Discovery phase and 2.25x more code in the Efficiency phase.
    • Inconsistent startups raise 3 times more capital in the Efficiency stage and 18 times less capital in the Scale phase.
    • The self-reported valuation of inconsistent startups before reaching the Scale phase is $10 mil. Consistent startups report $800k.
    • Inconsistent startups have 75% more paid users in the Discovery and Validation phases. Consistent startups have 50% more in the Scale stage.

    Common reasons for startup failure

    In the in-depth study of our interviews with the founders of 80+ failed startup projects that you can read in full in our Startup Mistakes article (which we're publishing soon), we found that the most common reasons for failure are the following:

    GRAPHIC

    • Marketing Problems (56%): marketing mistakes were the biggest killers, and the biggest problem by far is the lack of product-market fit. Don't invest a lot of time and resources before you are certain people want what you are offering. Validate your assumptions quickly and cheaply, and if needed - pivot.
    • Team Problems (18%): problems like lack of domain knowledge, lack of marketing knowledge (and plan), lack of technical knowledge, and finally – lack of business knowledge, are the biggest killers. Friction within the team, lack of motivation, and lack of availability are also common, but less deadly.
    • Finance Problems (16%): more than 50% of the interviewed founders didn't have a budget for their project, and 75% were self-funded, yet only 16% point at financial problems as the reason for failure. That's because you don't really need a lot of money to test and validate concepts (you need effort). You need money to grow an already validated concept, so financial problems plague mostly exclusively later-stage startups.
    • Tech Problems (6%): rarely a big killer even though the vast majority of the interviewed startups have some kind of technology in their core. The biggest mistake is over-investment in expensive technology (developer time) before the marketing assumptions have been validated.
    • Operations Problems (2%): for software startups like most of our interviewees, operational problems are understandably rare. For startups that work with physical products, this might not be the case.
    • Legal Problems (2%): largely overestimated, and very rarely the reason for failure. That said, heavily-regulated industries like food and finance still present legal obstacles.

    Disclaimer: most of the projects we interview are true startups (rather than new traditional businesses) and have some form of technology (usually software) in their core. This means our conclusions might not be that useful for new projects closer to traditional brick-and-mortar businesses. Moreover, we gather the data by interpreting qualitative interviews (rather than surveys), so allow for some error for interpretations.

    Startup failure rates by Industry & Sector

    When talking about traditional businesses, statistics from the Office of Advocacy show that new business failure rates are very similar across industries (source).

    For true innovative tech startups, there aren't good sources of failure rates divided by industry. Nonetheless, this graphic coming from the Startup Genome 2019 report might prove very valuable. It divides startups into sub-sectors, and measures if the sectors are growing, mature, or declining based on the early-stage funding they tend to receive and the 5-year exits:

    GRAPHIC

    Some failure examples from the hottest sectors:

    Agtech & New Food

    Example failed project: The Poultry Exchange

    A big challenge Agtech startups are facing is introducing new technologies (especially digital) to a mature, traditional industry that might be short on early adopters.

    Blockchain

    Example failed project: 300Cubits

    Blockchain has obvious potential. Yet, the reality of the overly-volatile and speculative coin market as well as the unfamiliarity of potential stakeholders with the technology makes it hard to put theoretically sound ideas into practice.

    AI, Big Data, & Analytics

    Example failed project: Roadstar.ai‍

    One of the industry giants in trouble: MapR

    Even though the long-run potential of AI is unquestionable, the technology is in its infancy, and finding economically viable applications for it fast enough has proven to be a hard nut to crack. A lot of the most famous AI startups (e.g. OpenAI) resemble a fundamental science research team more so than a business team. A lot of the investors in the field are playing the long game.

    Advanced Manufacturing & Robotics

    Not a formal statistic, but industry experts believe the robotics startup failure rate is 99% (!).

    There are many reasons why, but it boils down to "robotics startups are tackling an extremely hard technical problem".

    Best Startup Environments

    If you are starting an innovative tech-based startup, your best bet is to operate in one of the leading startup ecosystems in the world. There you will find the greatest density of invaluable resources like know-how (mentors, IT talent, marketing talent) and startup finance (angel investors, VCs).

    Here is the 2019 Global Startup Ecosystem Ranking, as given by the Startup Genome project:

    GRAPHIC

    Silicon Valley leads the way worldwide and in the USA. London is the strongest European startup cluster, while Beijing is the most prominent startup hub in Asia. That said, startup culture is spreading all over the world, and while once the only viable place to found a true startup was the Valley, nowadays viable alternatives are much closer to home for most entrepreneurs.

    Final Remarks

    We hope that we succeeded in clearing up some of the confusion about startup and new business failure rates!

    Startups are without a doubt very risky, but with great risk comes great potential. Potential not only for financial returns, but for progress and innovation that could improve the quality of life of people all around the world. So, don't let the risk of failure discourage you! Be audacious!

    If you like our content, make sure to sign up for our email newsletter below! We share inspiring interviews with failed and successful startup founders as well as other kinds of interesting content and resources about entrepreneurship!

    ---

    Cheers!

    Source: Startup Failure Rate: Ultimate Report + Infographic [2020]

    submitted by /u/dotahaven_MrNiceGuy
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    Have you ever dreamt up a terrible business idea?

    Posted: 10 Aug 2020 09:52 AM PDT

    I've gotten to the point where I sometimes dream about new business ideas. In addition to being an entrepreneur, I also work at HubSpot. Recently, I had a dream that I was pitching an idea to our CEO for a new suite of tools that I called iFrame Hub. The concept of the new Hub was that we'd create a header and footer for a website page and then just give you an iframe to put existing pages in. In my dream, I remember thinking "this is brilliant and such a good business idea" and going into my pitch meeting with absolute sincerity.

    I practically woke up laughing.

    submitted by /u/BlakeTheCoach
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    Sharing my favourite frameworks to make better decisions! What are yours?

    Posted: 10 Aug 2020 04:16 AM PDT

    Edit - Hope this is not against the sub rules! I am also including the list of resources where I learnt all this stuff from --> I had been compiling my research until now Notion doc which I have shared here.

    I stumbled upon some fabulous articles at Farnam Street last year which made me think about decision making as a skill. Why arent we taught about that in school?

    Do successful people know the science behind it or they just make good gut calls? How close can one get to making a science / actionable checklist of making decisions? I have now spent almost an entire year deep diving into this concept. It's a fascinating world of mental models, frameworks & cognitive biases. I wrote a 2000 guide about it recently here, and I want to continue adding to it (maybe a wiki one day??) by learning what works from other leaders and founders. I hope such a resource will help everyone be more effective. Of course, not everyone framework works for every scenario e.g. if you are a VC funded startup your main goal is to avoid the #2 below :D

    #1 - Focus on avoiding stupid decisions, not finding brilliant ideas

    I read about this via Benjamin Graham & Warren Buffet. I used to spend way too much time trying to find great ideas. Now I just focus on the basics first.

    #2 - Avoid ruin. Survive long enough to get lucky.

    Found this via Naval Ravikant. There is an entire mathematical model around this called Kelly's Criterion. It shows how much you can gamble on each round in a poker game! This one took me the longest to absorb. Does this mean that you don't take big risks? Probably you have to find your own barometer.. I am using this personally myself a lot. Hopefully will help me build a "build to last" SaaS!

    #3 - Invert, always invert

    Applying this leads to #1 actually e.g. instead of finding how to succeed, find how to fail. Thinking in bets by Annie Duke also touches on this topic.

    #4 - Decrease the scope and make small bets

    This one is called Parkinson's Law. Found it in a fantastic post by the Basecamp guys. It simply means that work expands to fill the time allocated to it. So if you can keep shipping small MVPs of your big features, you will be good!

    #5 - Analyse 2nd & 3rd order effects of your decision

    This one is fascinating, and yet obvious in hindsight. The technical term is Chestertons Fence and there is a lot of research that have been done on this.

    I am reading about many more such frameworks e.g. First principles thinking right now. Would love to learn from others and understand the ones that people here prefer and have found working for them?

    submitted by /u/adityarao310
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    So it may not seem like a lot, but we got our first subscribers

    Posted: 10 Aug 2020 01:04 PM PDT

    In the first week of actually working full-time on the platform, we increased our weekly traffic usage by over 300% (200+ unique viewers) and hit a new daily high total of 91 unique members.

    We also got 6 new subscribers without a fully functional product yet! I also realized halfway through the week that the Facebook signup button linked to our contact page and not our actual member page. Whoops!

    Definitely a huge win and will be testing some paid ads this week.

    submitted by /u/QuarbonX
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    University podcast guest

    Posted: 10 Aug 2020 12:45 PM PDT

    Hello people, hope you all are safe. My name is Sudarsanan and I'm a college student from India. My uni conducts a techno fest every year and I'm a part of their promotions and outreach team. We are planning on hosting a series of podcasts on some popular techno-management topics. So if anyone could suggest me some entrepreneurs/ social workers/ NGO heads/ marketing heads who are technically sound on their domain and willing to guest in an episode of our podcast, that would be really really great. If you want the details, ping me, my ig handle is: zooooodarsan. (With 5 O s) Thank you all.

    submitted by /u/marvelmonk
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    A frustrated enterpreneur

    Posted: 10 Aug 2020 09:20 AM PDT

    First: sorry for my english; spanish is my first language. I just started a business selling artisan made handbags and accessories from Mexico and Guatemala, if some of you are familiar with those, they're very rich in colors and flowers shapes, anyway, we just opened a little booth in a artisan market in Hudson Valley in New York, but very slow sales and people look at them and they think they're pretty but nobody is buying. For some context, I only have two kind of bags: colorful and beach bags which could be the reason nobody is interested, but I was so eager with this project, trying to make it a sort of living and a model of business, but at this moment is just draining all my money. I don't have a online website, but just with the booth I'm losing the interest of building one. What can you advise me? Thank you!

    submitted by /u/disealeco
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    How would you market a Pokemon card company/Twitch/Youtube channel?

    Posted: 10 Aug 2020 11:28 AM PDT

    I'm starting a company where you can buy discounted Pokemon card packs. They are discounted because I will open them live on Twitch (posting later on Youtube) and will send the customer only the rares (I will keep the common cards). It is a popular concept with channels like Deriums and Pokerev doing well out of it, but the concept doesn't have a real leader in my country/region.

    ​

    What techniques would you use to market this? Giveaways and the like are ok, but I don't think they necessarily attract loyalty or people who will want to actually pay for the product. I also might struggle posting in Pokemon related forums as it would likely be viewed as self promotion/spam. Local Pokemon events are an option but due to the current situation that won't be possible for the foreseeable future. I don't really have the funds to buy tons of booster boxes in the hopes people start watching and buying, so if I do spend on product I need to be creative on how I use it to get the most exposure possible.

    ​

    Any thoughts and ideas would be greatly appreciated!

    submitted by /u/DataDynasty
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    Many people here in the past couple weeks have been asking how to find like-minded entrepreneurial people locally. I've been working on a tool that I hope will solve this for you.

    Posted: 09 Aug 2020 03:18 PM PDT

    Hi /r/Entrepreneur,

    I've been reading this subreddit a lot the past few months and I've noticed a lot of people here looking for ways to find other like-minded people near them. For example, /u/mfreeman3223 just last week was talking about how they feel like nobody locally understands them and that it's holding back their potential. Also, there was this post just made yesterday where /u/itsjustdifferent_ had several ideas for apps that involved an app that matches people based on their goals / interests in life. Similarly, just today /u/Regis_ made a post asking for tips on how to make connections as a school graduate, and 30 minutes ago /u/anniebananaie made a post asking how young entrepreneurs can find like-minded friends.

    I actually had these exact same problems, considering none of my friends were interested in creating a startup. As a result, I went it solo. I spent the past year working on a website / app that is my best attempt to solve this difficulty. The idea is pretty simple: you're presented a list of cards and you swipe left or right on them depending on whether you like the concept (examples include Vaccines, Podcasts, Raves, Musicals, Programming, etc.)

    You are then able to indicate your individual, specific interests (examples: Startups, Entrepreneurship, etc.). By doing this, you are able to search for people like you and filter based on similarity, distance, interests, age, last online, etc. You can also create and browse for public posts, along with filtering them based on these aforementioned criteria. Feel free to also fill out your profile with any additional ways to reach you, or what you're looking for.

    By doing this, my hope is that people like /u/mfreeman3223, /u/itsjustdifferent_, and /u/anniebananaie can find that initial connection with these local entrepreneurial people that they're searching for.

    My goal in making this post here is three-fold:

    1. I'd appreciate any feedback. I recently posted this to hacker news and before that to the SSC subreddit, and each time was great as I was able to receive a bunch of amazing feedback and iterate upon it to improve the site.

    2. I'm hoping that this tool is genuinely useful for you. Maybe I'll even have some luck and find some people near me interested in the same things. I feel a bit in over my head to be honest so it'd be great to have some people to talk to about everything.

    3. I was wondering if anyone here has any advice on how to get the word out for this sort of thing. I've only ever known programming, so this marketing world is completely foreign and new to me. I feel kind of weird about self-promotion, and I'm not really sure on how to advertise this in an ethical and organic way, other than posting to some subreddits and hacker news.

    Anyways, if you'd like to check it out, here's a link. No pressure at all to create an account, as I tried to make as many features as possible available without logging in. Thank you so much for reading!

    submitted by /u/pitherandd
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    Networking Event: Finding the Right Funding Channels For Your Business

    Posted: 10 Aug 2020 02:31 PM PDT

    No ads, no trying to sell anything. Just a diversity networking event to share valuable information. During this information session, we will discuss about about:

    • Available financing products for entrepreneurs of color
    • How to find the right financing partner for your business
    • How to develop a game plan for your financing needs
    • What lenders look for in a business loan application

    Questions for the expert are accepted and encouraged.

    https://powertofly.com/career/live-chats/289846-finding-the-right-funding-channels-for-your-business

    submitted by /u/wrstand
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    Difficulty in finding food distrubutors

    Posted: 10 Aug 2020 02:18 PM PDT

    I'm a new retailer looking to start selling dry goods online. I have been reaching out to food distributors so I can get a quote, and be able to plan out my pricing strategy, shipping, etc.

    However, it's been very difficult. It's almost impossible to get a hold of the salespeople in these distribution companies; it doesn't seem like they want to provide a quote?

    I'm confused because don't they want the sale? I understand that I'm still small, but you've got to start somewhere? How did these medium-large companies even begin without starting small?

    One distribution company wanted me to do a credit application with them, but I don't even know if they will approve it anyway since my business isn't profitable yet, so there would be nothing to show?

    Any advice other than persistently calling them?

    It looks like they want me to place my orders right away rather than have them go through the hassle of manually quoting me on thousands of items in their catalogs without any real commitment from the me (the customer) yet?

    submitted by /u/llamamama88
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    I have a mascot character that I had on MMA t-shirts. The tees didn't sell at all, but the real life character was very popular among people at different expos. Everyone wanted to get a picture with him. My question is what type of business do you think could be built around such mascot character?

    Posted: 10 Aug 2020 02:16 PM PDT

    One of my buddies told me to get someone stand at the Strip in Vegas or in other popular destinations and just charge money for each picture but I would prefer something more "stable".

    I am curious for your opinions and ideas what would you do in this case?

    Thanks

    submitted by /u/mayermail1977
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    Unsolicited Investment Emails - Spam?

    Posted: 10 Aug 2020 02:11 PM PDT

    I run an online business, and every couple of weeks I'll get personalized emails from investment firms asking to set up phone calls. The emails use enough personalized information that you know they are not being generated with a random email list, but still feel a bit like a script.

    Is this common? Is it just spam?

    submitted by /u/Cowpoke_McStink
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    Customer Discovery Help! #marketplaces

    Posted: 10 Aug 2020 02:09 PM PDT

    Hi everyone!

    I am looking to talk to any service marketplace founders (e.g. "marketplace for stylists", "marketplace for dentists", "marketplace for [service provider]", etc.) for ~15 min over the phone regarding their experience thus far on starting a marketplace company (i.e. what tools you have decided to use, why, what questions you have at your stage, etc.)?

    Thanks for your help!

    submitted by /u/parispolaris
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    Starting and growing an info/guides site?

    Posted: 10 Aug 2020 02:00 PM PDT

    I'm looking into starting a niche site which will host information and guides for building a certain item within my niche.

    I also want to allow users to upload their own builds but I want the formatting consistent and reliable.

    Most of the content in my niche is strewn about on different sites and Reddit posts.

    It'll be very similar to PCPartPicker.com or CyclingBuilder.com.

    What's the best way to go about starting and growing a site like this?

    What pitfalls to look out for?

    submitted by /u/FurtherConcepts
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    How do you quantify market demand levels?

    Posted: 10 Aug 2020 04:59 AM PDT

    Hi everyone.

    I'm a brand consultant who's doing market research in a certain industry in order to see if there's a need for what I do, if their problems are big enough for me to build a business around by solving them.

    I'm curious, how do you determine how MANY people are there with a demand for what you do?
    How do you do that research at scale?

    The research I'm doing now is qualitative, very personalized and specific within niches of that industry. Going one industry niche segment at a time, very slow progress.

    The research I'm doing now answers if there's a demand.
    Now that I know who needs me, what I want to understand is how MANY of those people are there.

    Do you have any suggestions for going about this on a budget (without hiring a market research company to do quantitative research)?

    submitted by /u/salko_salkica
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    what’s the best way to run a grocery delivery service?

    Posted: 10 Aug 2020 02:41 AM PDT

    I live in a small town and the nearest walmart is 45 minutes away, so this was already a problem for the community. i had the idea a few years back, but ever since covid hit, i know it could take off. walmart has made it possible to pick up groceries, but i want to be able to pick up groceries for multiple people at one time, so they'd have to order before a specific time i set. but i can't seem to find how it would work since walmart has certain hours for pickup themselves. any other ideas?

    submitted by /u/alexyovv
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    I'm 20 and stubborn, and no one thinks i can do it.

    Posted: 10 Aug 2020 12:30 PM PDT

    Hi👋, let me introduce myself.

    I am a 20 year old boy from Belgium, my main education was woodwork and construction. After these studies were done i studied digital marketing for 1 year. I've always liked to make things out of wood, but the art of digital marketing has caught my interest since my younger years.

    I am young and would like to work independently. I hate and don't want to work for a boss. I have not had to work much for a boss in my life and would like to keep it that way. I am convinced that with my young knowledge i can grow companies through digital marketing. I don't know everything about this profession and still have a lot to learn. My knowledge about business and running a business is also very small. Yet i feel confident enough to do this.

    The reason i chose this title is because i know that this might be a stupid idea, but i would like your opinions / tips about it.

    Thanks✌️

    submitted by /u/OberVictor
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    Can anyone recommend any books or resources for business buying strategies?

    Posted: 10 Aug 2020 12:04 PM PDT

    I've been asked to help build a small deal-flow team for a client, Looking to source potential deals in the $10mm to $20mm range but I'm struggling to find detailed info specifically related to potential pitfalls in this particular market . The target companies are not quite small biz, nor mid-market and whilst I'm trying to find an effective way to screen potential targets, I'm being met with either "M&A gurus" or brokers desperately trying to set my client up for a call. Has anyone here had any experience in this kind of thing?

    submitted by /u/preheatpeshwari
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    Courier Company - Tracking Labels

    Posted: 10 Aug 2020 11:33 AM PDT

    Hi guys

    I wonder if you can help. I have a friend who has a small courier company - handful of vans. He delivers big warehouse items. He's at the stage where he'd like to create his own 'shipping' labels - from/to, box x of x and so on, just to make him look more professional and help track goods.

    I have absolutely no knowledge of this area, and really have no idea on what to search on. (UK based)

    submitted by /u/PiratesOfTheArctic
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    Where do I find someone who can writes privacy and terms and conditions for my application

    Posted: 10 Aug 2020 11:30 AM PDT

    Hi, I am develop a web application and need someone to help writing the privacy and conditions. I don't know where to find them and how much would it cost to do that? Can we just copy it from some website or it has to be your own words?

    Is it a requirement that we need to put on the website anyway?

    submitted by /u/Sillygirl2520
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