# The #1 Reason Why Startups Fail - Don't Make This Mistake!! Channel: Rob Walling Video: https://www.youtube.com/watch?v=cqTj5uShIpY Duration: 9 min Language: English Words: 2017 Transcript page: https://viewrankai.com/tools/youtube-transcript/cqTj5uShIpY --- [0:00] in this video I covered the number one reason startups fail so you won't make the same mistake and if you stick around until the end I'll also tell you the number two reason most startups fail I'm Rob Walling I'm a startup founder with multiple exits author of three books on building startups and an investor and more than 100 companies I'm going to start with the big reveal I won't beat around the bush the number one reason that I see most startups failing is they don't build something people want and are willing to pay for because it's not easy to do it's a lot harder than a [0:27] talent and if we break that sentence down to its components we have building something people want and building something people are willing to pay for and those are two separate things so let's dive into the first one even building something that people want to use or that they care about or that they don't ignore in this age of new products and I'm going to stick to SAS and software products new software coming out every day how many do we see launching on product hunt or Hacker News or Reddit it's not as easy as it sounds let's say that you do let's say that you scratch your own itch so you know at [0:54] least one person wants it you build something at least one person wants or you validate that others want it you have conversations in advance and so you know that more than one person wants it it's possible to build something that they want and that they'll use but they just really aren't willing to pay for a big mistake that many makers make like people who are trying to get startups and SAS companies off the ground is that they make big assumptions about what the world needs and they don't start from a problem they start with just an idea and it's an idea they might pull out of thin [1:22] air or an idea they think the world needs and oftentimes like more often than not the world actually doesn't care if you don't solve a problem and specifically solve a problem for businesses that's really what this channel focuses on then the odds of you building a successful SAS startup are very very low in that case you're gonna have to realize so much more on luck than a repeatable process but let's say you do build something people will use but they're not willing to pay for it you know think of all the free tools that you see where they have tried to monetize but instead they use AdSense or [1:54] they have a tip jar that you know brings in ten dollars a month imagine like when you go to Google convert an image to a PDF or convert a WAV file to an MP3 or submit my podcast to these three or five directories these are things that people want to get done but they're not willing to pay even a few dollars because they know that they can go to another website or they can use an existing tool they have or they can just click on the three places and submit them by hand and people are notoriously relatively cheap when it comes to these types of things [2:24] so it's not even easy to build something people want and it's even harder to build something that people will pay for but let's really focus on something businesses people will pay for because if you want to build for people meaning consumers I'll just say you're in the wrong Channel like consumers are cheap they churn fast you need basically zero cost marketing to work with them because your price points have to be the six dollar ten dollar a month you know think of Netflix and HBO and Spotify and if you want to go start Netflix or Spotify you can go do that you're probably gonna have to raise buckets of funding like [2:56] they did and this video and this channel are not focused on that we are focused on B to B we're focused on building software for businesses because businesses are willing to pay more and bootstrapping or mostly bootstrapping a SAS app that focus on businesses is so much easier and more repeatable than trying to build a business that focuses on consumers and so if you are trying to build something businesses want and are willing to pay for number one solve a problem right you want to save them time you want to make them money or you want to save the money we could go into a whole video explanation about the [3:27] differences between those and which I think are the best and rank them in order and this and that it's not the scope of this video But realize that solving a problem and starting with a problem that a business has and hopefully realizes they have and hopefully it's such a strong problem that they have tried to search for a solution but there isn't a good one out there or the solutions are too expensive or they're too complicated or they just aren't a good fit for this Niche and so you start with that problem and then you build out from there and you might be wondering why is it so easy to fall into [3:55] this trap of not building something that businesses want and are willing to pay for and the reason is is because most people who build startups are either developers or product people or designers and so they love to build right we love to build I was a developer for years and it's easy and it's not scary and it's not risky to stay in your comfort zone and to do what we do which is build but it's hard and it's not fun but it reduces risk to talk to customers right to validate your idea to maybe use human automation as I talked about in my first book start small stay small where [4:28] you can build an MVP with a few virtual assistants behind it and almost no software in place or you can build using no code or you can build a really stripped-down MVP that maybe you're not proud of as a builder but at least it validates assumptions because that's what you're trying to do in these early days you're trying not to spend months building in your basement burning through your savings or burning through you know your spouse or significant others trust as you build something that then is a huge flop if you want to avoid the possibility of building something no one cares about and no one is willing to [4:57] pay for then you should think about doing the the hard not fun things but the things that reduce the risk of building something no one cares about and I get it it's not the awesome feeling you get out of shipping code or building a scalable software product building a full-blown SAS app it actually is kind of fun for the you know nerdy people like me who love shipping software but in many cases especially for first-time entrepreneurs the path of working on the things that maybe aren't as interesting but the de-risk the idea and the company is a much better path so now just a couple tips on how not to [5:30] make this mistake how not to fall into the Trap of building something no one cares about first thing is start with a problem as I already said earlier you start with a problem a business has and you build out from there you try to come up with a solution that maybe you can present to whoever you're trying to solve it for and figure out does this solution make sense then later you go build software you don't start with the software number two don't try to be too clever so many successful SAS companies are really just a simple Twist on an existing product or refresh of an older [6:00] clunkier competitor there are a lot of CRM systems and yet you could still today build a CRM system that would get traction there are a lot of email service providers but I know that today just like I did back in 2012 to 2016 you could build an ESP that would compete with the others doesn't have to be something incredibly novel now you do have to think about am I going to be positioned differently do I have some type of advantage that I can use because you can't have a commodity software I can't just replicate stuff on the market and expect to get traction but oftentimes it's just a simple little [6:29] twist on existing solutions that already exist in the space think about it this way a lot of businesses are using Excel or Google Sheets to solve problems and so your solution doesn't have to be some groundbreaking piece of technology it can just be a step up from that Excel spreadsheet I like to say wherever there's an Excel spreadsheet There's an opportunity for a B2B SAS business and lastly I said this before but try to avoid working on the easy things that are in your comfort zone if you're a designer you're going to want to redesign your homepage over and over if you're a developer you're going to build [7:00] more features really the hard things are talking to customers trying to validate or invalidate assumptions maybe grinding on marketing and spending time making sure that the problem that you are trying to solve is a problem that exists in the market and it's a market that you could potentially compete in by having some Twist on the current Solutions in just a second I'm going to tell you the number two reasons I see startups failing but before I do that if you enjoy this Channel and this type of video you should check out my podcast called startups for the rest of us it's available in any places that greater [7:34] podcasts are served and I've been doing that for 12 years now we're up north at 600 episodes and I talk about this kind of stuff entrepreneurship starting B2B SAS companies growing them and whether it's a solo episode I'm answering listener questions or having an interview with a successful founder this is content that resonates with a lot of people tens of thousands of folks listen to these episodes and if you like this channel I'd encourage you go check out startups for the rest of us so then number two reason I see a lot of startups failing is even if they build something people want and something that [8:05] businesses are willing to pay for they expect that a good product will sell itself and they cite examples like Apple computers or the viral game or the viral piece of software that they read about on Hacker News or a friend of a friend built and it just took off this is almost never the case successful products that become successful companies pretty much always require some level of marketing and sales and just working with customers to get them on board building it and expecting them to come almost never happens but the problem is is as makers we focus on those cases because we want the world to [8:39] be that way we want the best product to win in almost all cases the best product does not win it's usually the best marketing and the best sales so I hope you enjoyed this video if you did I'd love it if you'd hit the like button post a comment below if you have questions and of course subscribe to the channel we have videos like this coming out every week and I look forward to talking to you in the next video [9:00] [Music] thank you --- About this transcript Read from YouTube's own caption track and laid out by ViewRank AI (https://viewrankai.com). 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