5 Ways International Business Startups Fail
Half the people who saw “The Social Network,” the movie about Facebook and its success, said to themselves, “Hey, I’ve got a great idea for a startup. Can’t wait to join Mark Zuckerberg in the millionaire club!” But we all know that most of these people are engaged in nothing more than wishful thinking. On September 19, 2012, the Wall Street Journal reported, “About three-quarters of venture-backed firms in the U.S. don’t return investors’ capital, according to recent research by ShikharGhosh, a senior lecturer at Harvard Business School.” So how can a startup business avoid failure? Start by reading below, a list of five ways international business startups fail.
#1 – Going too broad with the product or customer base is not a good plan. Many businesses think that they should appeal to everyone and anyone. But the truth is that any business that doesn’t narrow down its niche is going to fail on a number of fronts. The trick is to find the niche within the market that nobody else has found yet. When working on an international level, this can be both harder and easier. Harder because of how big the market is on that scale, but easier because you can group across nationalities. (Instead of marketing to American mothers, market to upper-middle-class mothers across countries with three kids and a job.)
#2 – Choosing the wrong headquarters can be lethal to an international business. If you want to create an international company, you must be headquartered in an international city. Montpelier, Vermont is not an international city. San Francisco, California, however, is an international city. Choose your location wisely. If you do not live in an international city, ask yourself if your ambitions to launch an international company are based in reality.
#3 – A failure to hire a diverse workforce will limit your product’s success. So many technology companies are comprised of only men that a lot of employers often forget that there are also women out there and many of them are also excellent programmers. Racial diversity is also important. Having a number of different perspectives means you will have a more appealing product, so don’t limit your point of view by staffing your business with carbon copy employees.
#4 – Not using social media – or using it incorrectly – will doom your company. Social media is huge – everyone knows that. But do you know how to use it? Although it’s important that social media be fun, when a business uses it, it also needs to be used strategically.You should be using social media to build your brand, learn about your competition, and get to know your customers and prospective customers. Engage with the audience, read other people’s posts, and learn from the media you are using.
#5 – Doing poor market research will guarantee failure. If you think you have a great idea, you might be tempted to run out the door, go get a copyright or patent, and then try to sell it. You might pour time and money into advertising and production. But you will probably be wasting your time and money if you haven’t honed your idea through market research. Market research means learning what your competitors are doing so that you can do it better, and understanding what your customers really want so that you can give it to them. It is crucial to a country’s success.
About the Author: Brett Gold writes on legal issues in the Chicago area. Brett gives probate law and other practice area advice to those in need. He spends time with his wife and on vacations has backpacked all over the U.S.A.