As a player in the programming or development industry, you may have heard the term ‘technical project manager’ being thrown around quite a bit, especially in recent times. If you’re working on a team project, it is likely that you will be placed under the supervision and guidance of a project manager who will be beside you every step of the way, which is why it is important to understand what the role of this individual actually is. So, what exactly is a technical project manager?
What Is A Technical Project Manager?
The role of a technical project manager is to control, monitor, and ensure the proper execution of a business or company’s projects to which they have been assigned. The project manager would help the company schedule the project, distribute the resources, and ultimately view the entire process through a bigger lens. Also, to make sure that the goals are met through the technical aspect of the relevant project.
A technical project manager also has the ability to support the management of an IT initiative from a concept through to a concrete deliverable as a project with special technical knowledge.
What Are The Responsibilities Of A Technical Project Manager?
The life cycle of a project can be divided into five different phases:the initiation, planning, execution, monitoring/controlling, and the closing phase. The technical project manager has significant responsibilities in each of these phases that range from progress assessment to team management. The following below are some of the most critical responsibilities of a technical project manager throughout the project development and execution process.
Prepare a suitable project plan and schedule that the stakeholders and team members agree on and can follow.
Gather and break down the project requirements in terms of resources and monetary investment in order to determine the required budget.
Facilitate communication between the stakeholders and the developing team as well as among the team members for smooth and optimal functioning.
Make sure that the team members, stakeholders, or customers are satisfied with the progress of the project at all stages of its life cycle and the final product meets their expectations.
Identify any potential risks that may threaten the quality of the product or the project process and come up with effective strategies to counter them.
Take the necessary steps to maintain the high quality of the project.
Keep track of the progress of the development and ensure that the predetermined goals are consistently met.
Close the project after the customer’s expectations have been met.
It is also important to remember that having someone managing effectively, leads to a better outcome and having bad management can have many negative effects on a company/business.
Ultimately, we can conclude that the role of a technical project manager is not to become invested in guiding the coding process or the programming aspect of the project. But, it is to monitor the various operations involved in the process, assess the progress, deal with the overarching, and specific technical aspects using their own specialized knowledge in their niche. Most importantly, a technical project manager main responsibilities are to guide and manage the complete lifecycle of a project.
https://www.superteam.io/wp-content/uploads/2018/10/st_blog_final_CA-leader.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-12-29 00:37:162019-05-08 21:54:38What Is A Technical Project Manager?
You wake up at 3 in the morning. Your heart is pounding — your mind is racing. You’ve just come up with the next big idea for an app or website that is going to change the world. ‘This is it!’ you tell yourself — ‘my big idea!’ The only problem is, your background is in something other than tech. Maybe you’re a physician, or perhaps a collegiate coach. Maybe you’re a contractor, teacher, or a full-time caretaker…all professions that require unique skill sets and expertise. But you don’t know a thing about apps or websites or block-whatever. In this blog, we will go over the risks of hiring a freelance developer
The Temptation Of ‘Cheap’
If you’re looking for a developer who can help you make your dream a reality, it may be tempting to prioritize your budget during the process. You may want to hire a freelance developer who charges low prices and is easy to access online. They all do the same thing, right? So why pay $100 per hour when another person charges $25?
Today, around 10% of all developers identify as independent, freelance, or self-employed. Since a tech expert can be expensive to work with, freelance sites like Upwork or Fiverr are appealing, especially since they present you with many more affordable labor options.
However useful these sites can be, there is a hidden risk. If you want to create a site or program that is successful in the long run, it can pay to invest in more expensive help upfront. A real, qualified developer with experience can be essential for making or breaking the results of your product. Here’s why you should consider it.
Top-Talent Developers Can Work Faster
A budget freelance developer you find online may be able to offer you a low fee per hour. However, if the freelancer isn’t especially skilled at programming, it may take them many hours to finish the job. In the end, this extra time actually cancels out any financial benefit you could enjoy from hiring someone who is low-cost.
If your budget developer charges you $25 per hour but takes 5 weeks to finish a project, you are better off hiring an expert who charges $100 per hour that can finish the job in one week. Not only can a top-talent engineer work faster, but they can also consistently produce higher-quality work.
Freelancers Don’t Always Deliver High Quality
A developer who works freelance may have basic knowledge of how to build websites or apps. However, since they are working on their own, often times no employer has verified their competence or skill level. On the other hand, a developer working for a trusted company or agency got hired because of proven talent.
When you hire an experienced tech expert, you know their skill level and ability has been verified. When choosing a developer, to skimp on the budget is equal to skimping on quality, which can result in a product that will ultimately fail.
There are some on these sites who also pose as developers, but who actually are just there to make a quick buck. When the budget is small, you run the risk of hiring a scammer who will take your money, but not your calls. You need someone who will be accountable for their work and not disappear midway through the project.
Freelancers Don’t “Get” The Industry
When it comes to creating a tech product that’s going to succeed, you need to have the knowledge and an awareness of the existing market. The people helping you create your project should understand what competitors are doing, what trends are popular, and what new developments to expect.
When you work with a freelancer, you won’t necessarily be able to rely on someone who understands the bigger picture and can help ensure you’re creating a product that meets a real need. On the other hand, when you hire someone from an agency or tech company, you’ll be working with someone who understands the business and who knows what it takes to succeed in the field.
Freelancers Might Require Extra Work On Your Part
A freelancer isn’t wedded to working with you. They could work with you on a project, then go work for your competitor the next week. So, to keep your information safe, you’ll need to take legal precautions, like drawing up non-disclosure agreements.
Freelancers may also require more time to understand your project. This work on your part could end up costing you a lot of precious time and money.
How To Safely And Effectively Hire A Freelancer
If you simply don’t have the budget to hire an expert, or you want to give a freelance developer a shot, there are some steps you can take to ensure your experience is as successful as possible. First, find a freelancer’s portfolio to review their work and make sure they have the proper skills to create what you need them to. Next, if they work for a freelancer marketplace like Fiverr, read their reviews and make sure that other people have had a positive experience working with them.
Check to see if you can find former clients of theirs, and check their references. Hearing firsthand that they know what they’re doing is a good way to verify they’re a good choice for your team.
Finally, if this feels overwhelming to you or you’re not sure how to vet the freelancers you find, consider hiring someone with experience overseeing projects. A solution architect can help you understand the individual needs for your project and a project manager can help ensure the quality of the product. These experts can also handle the process of putting together the right team, so you can be sure you’re relying on pros to make your dream for an app or site a reality.
What are the reasons why businesses fail? Every year, thousands of wide-eyed and optimistic entrepreneurs embark on a journey to create the next big thing. With passion ablaze and a belief that success is attainable, they set out to change the world. The brutal reality, however, is that most will fail.
A recent study by CB Insights studied the post-mortems of over 250 failed startups. They found 70% of tech startups fail, and 97% of seed or crowdfunded consumer hardware companies pull the plug. The odds are against success- but not without a silver lining. Every failure presents an opportunity to learn. We can glean value in terms of what to do and what to avoid.
In his book “How Not To Die”, Paul Graham mentions two major reasons for startup failure: Simply running out of money, and the departure of a critical founding member. Often the two occur simultaneously.
Death Of a Startup
There are countless reasons a startup can fail. In our experience, a lack of knowledge and poor planning are often the most serious issues clients face. Even with boundless enthusiasm (and sometimes even a boatload of cash), it’s what business owners DON’T know that causes the biggest problems.
With an idealistic vision of what starting a company looks like, many new entrepreneurs avoid the thought that their business might fail. While confidence is always necessary, disaster awaits those who never take the initiative to safeguard their startup against common and avoidable mistakes. We’ve put together a list of the most prevalent issues plaguing new startups, with case studies for each.
1. Lack Of Market Need
Many startups fail simply because nobody wants what they are offering. 42% of the startups analyzed by CB Insights failed because there was no demand for their product in the market.
Start small. Conduct proper market research & feasibility studies, and utilize focus groups to find out what potential customers think of your product. The insight and feedback gained in this stage can be invaluable for your company.
Entrepreneurs often overlook the market conditions and variables — whether the market is ready for their product or not, the target demographics’ purchasing power, market saturation, etc. A good idea is not enough. The market must be ready for your product- whether they know it or not.
Zune was designed to be Microsoft’s answer to Apple’s iPod. The reason Zune failed was simple — Microsoft didn’t understand the market. If they did, they would have realized nobody wanted Zune. It was a product that offered no innovative features nor did anything superior to its main rival. People didn’t want an alternative to the iPod. Late entry into the space and poor marketing efforts gave the Zune little chance to win. A portable MP3 player…new and improved? Nope.
2. Running Out Of Cash (And Giving Up)
The second biggest reason for startup failure –reaching the end of the runway with no take-off. Maintaining a steady cash inflow is extremely important but not all businesses can start pulling in money right from the beginning. Running out of capital doesn’t necessarily mean the death of your company- but not knowing how to adapt does.
Many successful companies run at a loss for extended periods of time. Running out of money from a seed or series-A round of funding is not uncommon. You’ve heard the importance of an MVP (minimum viable product) but if you lose sight of your companies USP (unique selling proposition), you’re toast. By effectively demonstrating the value of the product, a company can raise further capital and extend the runway.
Case Study: Tesla (2002-Present)
The electric car maker giant started on very shaky grounds. In 2002, Elon Musk started Tesla alongside SpaceX. He invested $90 million in the companies but it wasn’t enough, and costs kept increasing. By the end of 2008, Tesla was on the verge of bankruptcy. The obituary was written and the press was ready to announce Tesla’s death at any moment. But as we know, Musk soldiered on and Tesla prevailed. He was able to deliver the first Tesla Roadster and secured further capital to keep the company alive.
3. Lack Of Sustainable Growth
“When you stop growing you start dying.”-William S. Burroughs
Forward momentum requires constant growth. The day you cease to provide increased value to customers, you open the door for someone else to come along and steal your crown. Without the momentum to escape the competition, newcomers will push you out of the market. Without growth, economies of scale cannot be realized, and your costs will remain prohibitive to profits.
In an ever-changing world, sometimes growth means changing business models or pivoting in a new direction. When a product has run its course, entering a new market or a new industry can be the necessary growth to keep a company alive. A failure to pivot, or pivoting late, can mean death.
Case study: Blockbuster (1985–2010)
The ubiquitous, American-based company provided movie and game rental services with over 9 thousand stores globally. In 2000, a small web-based movie rental company called Netflix approached Blockbuster with an offer to sell their company for $50 million. The Blockbuster CEO, blind to the rapidly shifting playing field, dismissed their “very small niche business” model. In the following years, Netflix pivoted to online streaming, rendering brick and mortar rental stores like Blockbuster obsolete.
Blockbuster failed to pivot and now exists only as a memory to millennials, their parents, and the butt of online jokes.
When facing a lot of direct competition, there are certain steps you must take to cement your market standing. Failure to do so could seal your company’s fate in the startup graveyard. To stand out, one must offer something new or something much better than what already exists. Taking competitors into consideration and developing a proper marketing strategy is crucial. Perhaps most importantly, the product must be priced just right. This becomes more complicated as competitors attempt to undercut each other in an effort to lure customers.
If you’re a pioneer and first to the market, you’ll need to take a different approach. You need to make it hard for potential competitors to enter the market by creating barriers to entry. These include patents, government rights, access to specific distribution channels, economies of scale, establishing yourself as the market leader and namesake, etc.
While ignoring the competition is a recipe for disaster, obsessing over it is not healthy either. The mission should be to provide as much value as possible to the customer. If you can find better ways to give more to your customers, you will have a bright future ahead.
Case Study: Toys R Us (1948–2017)
One of the largest toy store chains (and a piece of children’s souls everywhere) shut its doors recently. The downturn began with a 10-year partnership with Amazon. Toys-R-Us agreed to pay Amazon $50 million a year plus a percentage of sales to serve as an exclusive vendor. With a massive level of sales, Amazon began allowing other toy vendors into their ecosystem. Toys-R-Us sued Amazon and attempted to launch its own website to sell toys online, but it was too late. Toys-R-Us failed to compete with other online retailers’ prices. Plummeting sales and mounting debt left Toys-R-Us with no choice but to file for bankruptcy in late 2017.
5. Poor Management
Faulty recruitment practices, internal conflicts, poor communication, and slow decision making are just some of the headaches that come with an incompetent leader backed by an unqualified team.
A common mistake business owners make is believing they can do it all on their own. As any successful entrepreneur knows, the truth is it takes a team. Everyone has strengths and weaknesses. The founder’s job is to know each employee and hire the appropriate team members.
Case Study: Pan American Airways (1927–1991)
Once largest air carrier in the US, all that survives is its iconic blue logo after it went out of business in 1991. Poor leadership and an inability to solve internal conflicts were the two big problems for Pan Am’s management. Over-investing in existing business models and a lack of innovation brought about the company’s downfall. These issues combined with corporate mismanagement, complications involving US regulatory policy, and the government’s inability to protect its largest air carrier lead to the going out of business in 1991.
6. Having a poor product
In the end, everything comes down to the product. Because of this, there are many ways to fail at providing value to the customer. Consumers must feel like they are getting more than what they pay for. If the product doesn’t offer enough value to justify the cost, people will either not purchase it, or return it. Proper marketing efforts and branding are required to present your product honestly. If a product is marketed in a way that misrepresents the true value of the product, customers will be unhappy and you lose their trust. If the quality is lacking, then you’ve already failed, and there won’t be much hope.
Case study: General Magic (1993–2011)
General Magic was a company associated with Apple and had one of the largest IPOs of the 90s. It boasted partnerships with companies such as Sony, Panasonic, and AT&T. It was the hottest and most mysterious company of its time, shrouded in secrecy as they created a highly anticipated product. In 1994, they launched multiple devices using General Magic’s innovative touchscreen interface — and they all failed. While they spent hundreds of hours developing and testing their technology, they didn’t spend nearly enough time testing the product with consumers. Turns out the market didn’t want a heavy, expensive mobile device with a dimly lit screen that was hardly usable outdoors.
7. Premature scaling
One of the first things founders do after getting established and raising capital is hiring. This is the classic pitfall of premature scaling. Simply put, premature scaling is expanding your business before your product is ready for the market. Founders will often feel the urge to spend money left and right on things that “feel” necessary, but rarely are. The focus is diluted away from the core product and market.
As a company moves too fast, technical debt grows out of control. For software companies, hastily written code that is “good enough” to launch an MVP becomes a weak foundation, vulnerable to frequent breaking. Sprint cycles turn from weeks to months, and the benefit of agility is lost. Pivots become harder and harder, and new features take a prohibitive amount of resources to build. Problems are swept under the rug, and eventually, they come back to bite.
Case Study: Groupon (2008-Present)
Groupon started in 2008 and allowed users to get discounted goods and services by buying as a group. It pioneered the concept of early adopters by introducing coupons to the Facebook and Twitter generation, becoming known as the “fastest-growing company ever”. It was seeing extreme success. As they rushed to scale quickly, things took a turn for the worse. Continual reports of huge losses drove the share price lower and lower. Groupon’s mistake was prioritizing new customer acquisition instead of customer retention. It sought to scale while not dealing with pre-existing issues. Although not dead, Groupon is hardly the behemoth it once was expected to be.
Will my startup fail?
The question you should be asking is — why do startups succeed?
Because the odds are against you, you should focus on the practices that improve the chances of success. We already know what kills startups-so do everything in your power to not make the same mistakes. But for guaranteed success, you need more.
In business school, they teach the functions of management-the first being planning. Proper planning leads to every other aspect of good management. A solid plan involves taking into consideration all the current variables at play as well as forecasting future variables. All bases must be covered. Planning also facilitates decision making, helping to avoid conflicts in the future.
Discipline means that you do not lose focus, get distracted, or become lethargic. Far too often business owners either lose focus or get distracted with other things to the detriment of their business. Sometimes they even start new businesses or attempt to expand their startup while before finding its place in the market. A business in the startup phase requires much more attention than an established business, requiring founders to be proactive, as opposed to reactive.
Like everything in life, startups will have its ups and downs. What matters is that you do not lose hope. Keep pushing forward while focusing on the vision — the value you are bringing to customers. The day you stop caring is the day you’ve signed up for a plot in the startup graveyard.
Summary And Next Steps:
An entrepreneur who spends cash wisely, understands and adapts to the competition, develops best management practices, focuses on the product, and grows their business sustainably is setting their company up for a higher chance of success. Although following these guidelines are not a guarantee for success, not following them is a recipe for failure.
At SUPERTEAM our mission is to give entrepreneurs the knowledge and support they need to succeed. Our solution architects come from notable Silicon Valley tech companies and utilize their experience to help others. Check us out at www.superteam.io to learn more about how we’re empowering founders to make a difference.
https://www.superteam.io/wp-content/uploads/2018/10/st_blog_final_reasons-why-businesses-fail.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-11-17 14:01:012019-05-08 21:53:30Step-By-Step Guide On How To Fail: 7 Reasons Why Businesses Fail
Sustainable growth is a key sign that a company has matured past the startup stage. Although all companies should strive to obtain sustainable growth, not all of them will reach their potential and lack of sustainability in their business.
Two of the most important aspects of a new business idea an entrepreneur is told to look for is sustainability and scalability. Does the business have growth potential? If a business can continue to grow while maintaining sustainability, it will be able to scale.
What Are Some Risks An Unsustainable Business Faces?
If a company cannot reach a level of sustainability, it gives the competition an opening to take the lead.
Being pushed out of the market: Just because your company has lost its forward momentum, doesn’t mean the competition has. Rivals will continue to grow, gobbling up the market share. Some might even double down on their expansion policy in an attempt to drive you out of the market, eliminating you from the game.
Stagnation: Customers are always looking for more value. They are happy to pay as long as they feel are getting their money’s worth. But having a company with growth issues limits how much value you can provide to your audience. If you hit a ceiling and lose the ability to improve your product or service, your company will lose importance as others innovate and improve upon your business model.
Lack of economies of scale or prescaling: Economies of scale is a benefit that large businesses enjoy when they produce in large numbers. Each additional unit becomes less expensive to make. This relates to all types of industries. But a business that has no potential to grow will never reach the point where it can enjoy economies of scale. Almost all market leaders enjoy economies of scale in some form — it’s a huge advantage that allows them to maintain their dominant position in the market.
To Be Sustainable, You Need To Be Flexible
A business model that lacks flexibility will suffer in the face of a dynamic and ever-changing environment. Technology and trends can change on a whim, and sometimes the best decision is to pivot. This isn’t saying we advocate chasing trends…but the only thing worse than chasing a trend is chasing an old one. If the market has made it clear it has no interest in your product, you’ll need to adapt to find a need that isn’t being met yet.
Case Study: What Killed Blockbuster?
Lack of innovation, being insensitive to the market, and a business model that thrived on penalizing its customers — all of these things together brought the end of Blockbuster. Let’s address each of these issues one by one.
With the rise of subscription-based services like Netflix, Blockbuster was facing serious competition for the first time. It tried to innovate but in the wrong direction. It launched DVD-by-mail service in an attempt to copy Netflix and claw back some of the stolen market shares. When Netflix expanded into a streaming service, Blockbuster launched its own video-on-demand streaming services but was too late. Netflix was the new champion.
Blockbuster’s failure to sense the shift in the consumer’s mindset blinded them to the changing environment. Even when Netflix proposed a partnership, Blockbuster’s CEO balked at the offer and Netflix’s founder was laughed out of the office. Who’s laughing now?
Blockbuster’s business model was inflexible and prevented them from pivoting and maintaining sustainability. The late fees which Blockbuster leveraged against its customers brought in a lot of revenue. Depending on your age, you may have memories of racing to drop your movie in the return slot by noon. When Netflix launched its subscription-based service, one that allowed people the freedom to return their movies when they wanted, people were quick to choose the alternative.
Case Study: Soap, Baking Powder, & Chewing Gum
Today, when the world hears the name Wrigley, it thinks of chewing gum. But back in 1891, it was known chiefly for selling soap. The founder, William Wrigley Jr., offered free baking powder as an incentive for merchants to carry his soap. When the baking powder became more popular than the soap, Wrigley smartly decided to pivot and start selling baking powder. Inspired by his previous marketing success, Wrigley decided to give out free chewing gum as an incentive to carry his baking powder. As you probably guessed, the chewing gum became more popular than the baking powder. Wrigley’s, the gum brand, was born.
Because it had a flexible business model, Wrigley’s was able to pivot quickly. And remember when we talked about being pushed out of the market before? Wrigley’s did that to its competition back when the financial recession of 1907 hit. At a time when all businesses were struggling to stay afloat, Wrigley Jr. mortgaged everything he owned to borrow $250,000 to launch an aggressive advertising campaign. The plan worked as Wrigley’s soon became the most popular and largest selling brand in the United States.
https://www.superteam.io/wp-content/uploads/2018/10/st_blog_final_lack-of-sustainability.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-11-13 14:01:012019-05-08 21:53:23The 7 Deadly Sins Of Startups: Lack Of Sustainability
Time and money — two things we always seem to find ourselves short of. In the competitive arena of business, a company can be made or broken by how effectively it uses its resources. Or, they will be running out of money. Too many startups have run out of cash and been forced to close up shop. Having a poor cash flow can signal the impending death of a company, and not preparing how to deal with it means certain failure.
Every company needs money to operate and survive. For most startups this is a problem since they are less likely to be profitable in the early stages, spending more than they make. A company with funding has an advantage of being able to operate at a loss for some time, but even that will provide a limited runway. It’s imperative that a company continually works towards becomes self-sustaining.
How To Survive When You’re Burning Cash
Until your company is self-sustaining, you must watch your cash burn. The limited resources need to keep the company afloat until the next round of funding or until positive cash flow is reached. A prudent entrepreneur will only spend on the essentials and save wherever she or he can. But for many entrepreneurs, emotions get in the way. In a desperate attempt to spawn growth, they end up throwing money in every direction — sometimes it pays off, many times it doesn’t.
Some might argue that running out of money is normal for a startup. The argument says that by playing it too safe, you run the bigger risk of missing out on opportunities that could potentially launch your business. Still, a failed pivot is highly likely to be the last song a startup sings. The best way to spend your valuable resources wisely is to have a well-formulated plan, like a development roadmap, which can help you and your team focus on your goals and avoid wasting money.
Every business decision needs to be made while taking certain factors into account. Your company’s ability to take on risk can determine whether or not a cost-intensive pivot is the right thing to do. So what should it be? Go for the risky opportunity and hope it pays off or keeping grinding the same ax, hoping you reach profitability?
Case Study: To Pivot Or Not To Pivot?
Women’s clothing store Vanity closed shop last year after being in business for over fifty years. The South Dakota based business declared bankruptcy and closed all of its stores. Why? They couldn’t keep up with the changing business environment. Low sales and diminishing revenue forced them to call it quits. Many stores at the time were losing the fight against online retailers and more niche brands.
It wasn’t just Vanity that was struggling to make enough sales. Many other clothing stores were dealing with similar issues. Even Target, the department store giant which was once known for quality apparel was now in a tight spot. Realizing the doomed path is was on, Target decided to pivot. It invested huge sums of money into rebranding and marketing to modernize its image. It paid off. Sales increased, share price increased, and most importantly, Target was back on the map.
Case Study: The First Electric Car Company To Not Fail?
Yep, we’re talking about Tesla. The founder, Elon Musk made his fortune by starting an online bank which later merged with PayPal. Musk invested $90 million into SpaceX and Tesla, yet stated in an interview that he expected Tesla to fail. When the 2008 financial crisis struck in 2008. companies like Chrysler and General Motors received billions of dollars in government bailout money. Tesla got only a fraction of the help and was still in need of a miracle. When all hope seemed lost, German automaker Daimler invested $50 million into Tesla. Even then, up until 2013, Tesla was operating with one to two weeks of the runway.
Even though the financial situation you’re in likely differs from that of Elon’s, there’s a lesson to be learned. Despite enormous obstacles, include severe financial hurdles, Elon kept up hope. Many entrepreneurs give up when their company is strapped for cash and the end feels near. In truth, for a startup to succeed, the team must remain focused on their mission. Only through the commitment to provide real value to the world can a team survive the storm and find profitability. Lose sight of the mission, and all hope will be lost.
https://www.superteam.io/wp-content/uploads/2018/11/st_blog_final_running-out-of-money.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-11-10 14:01:012019-05-08 21:53:15The 7 Deadly Sins Of Startups: Running Out Of Money
The Four P’s Of Marking: Price, Place, Promotion, And Product
Poor product design plays a big factor in startups failure. There’s a reason why a product is said to be the most important part of the marketing mix. In today’s world of cut-throat competition, producers have no alternative but to compete for the best offering in the market. Don’t mistakenly assume the other P’s can save you — inferior products cannot sustain on hype alone. Eventually, word will spread that what you’re selling isn’t worth the price.
Every year, thousands of startups fail due to offering a poor product. So, how do we ensure that our product is better than anything else on the market? We must step into the customer’s shoes and understand what makes or breaks a product. A product is your offering to the market, and you have to execute perfectly on the design, features, user experience, timing of the launch, and promotion.
Factors Of A Successful And Poor Product Design
Value: Your product needs to offer more value than what you’re asking for in price. Value can be in terms of utility (usefulness), quality, customer service, design, and brand value. Customers should always feel like they are getting more than their money’s worth. Create more value for your customer than anyone else, and you’ll be successful.
Pricing: Failure to price a product correctly accounts for roughly 1/5th of startup failures, according to CB Insights. Price too low and your profit margins will disappear. Price too high, and you kill sales. The price point of your product significantly affects your revenue, so it’s important to get it right.
Timing: The same study by CB Insights found a mistimed product launch accounted for 13 percent of startup failures. The market, whether they know it or not, must be ready for the product. If you’re too early to market, people will struggle to see how your product relates to their lives and needs. Entering too late into a market can mean giving your competitors an insurmountable lead. However, if you time your launch just right and compliment it with the right promotion, you’ll have people saying “I’ve got to have that!”
Case Study: The Not-So-Magical Smartphone
General Magic was a hot tech startup of the 90s. They developed a handheld device— like a PDA, but with a touch interface and focused on communications. They essentially produced the first smartphone. However, despite technological breakthroughs, the final product was found lacking. The “phones” it made by partnering up with giants such as Sony, Motorola, and AT&T were not user-friendly. These large, heavy devices had screens that were difficult to read in the sun. And starting at $800, the price was far out of reach for the average consumer.
Although achieving significant advances in the communications technology sector, the usability issues and high price kept General Magic’s hotly anticipated device from reaching mass adoption.
Case Study: South Korean Success
Samsung is one of the largest companies in the world in terms of revenue. The conglomerate is the parent company of Samsung Electronics, Samsung Heavy Industries, Samsung C&T, and Samsung Engineering, Samsung Life Insurance, and more. Through careful planning, market research, and innovation, Samsung has created ultra-successful products. In the 2000s, Samsung went from being nowhere in the smartphone business to climbing to the top mobile phone manufacturer. By creating an incredible amount of value for consumers, Samsung has managed to capture nearly 50% of the Android-run smartphone business.
In order to be successful, you must inspire the market to purchase what you’re selling. This becomes incredibly difficult if nobody has any use for your product! The importance of market research is critical as a startup. Too many businesses have failed to create anything of true value for the market. In an analysis by CB Insights, nearly half of all startup failures were due to lack of market need.
Importance Of Market Research
As confident as you may be in your idea or product, thorough market research is a must for any startup. There is simply no point in developing a product or service nobody will want. Market research must include establishing the need for your product, the competition, suppliers, relevant laws & regulations, information about the target demographic, etc.
You can’t assume people will want what you sell. Market research, feasibility studies, and focus group testing help to challenge your hypotheses. If you’re wrong about the market, it is absolutely crucial to find this out ASAP. If you’re on the right path, this data can also help tremendously in securing funding by demonstrating real demand for your product.
“The greatest tragedy of mankind is people holding on to wrong opinions… ” — Ray Dalio
So how do we get this right? Let’s start off by taking a look at a prime example of how to get it wrong by ignoring market need.
Case Study: Zune’d For Failure
Microsoft launched the Zune in 2006, the Zune HD in 2009, and by 2011 the brand was discontinued. Zune was launched as a direct competitor to Apple’s iPod. Despite the aggressive marketing efforts by Microsoft, it had little success. The problem with Zune was that it offered nothing new to customers. Apple was already miles ahead of Zune in terms of technology, and there was no need for an alternative MP3 player. The iPod was first to market and Zune was never able to convince consumers to make a switch.
Lack of market killed Zune, and Microsoft failed to anticipate this due to a lack of market research.
Don’t let this good-looking stud fool you — Microsoft is not cool or trendy. These two words are generally reserved to describe Apple. Thus, their marketing efforts were focused on people who didn’t identify with the iPod. However, at this time most consumers either had the iPod or wanted the iPod. Microsoft was left with a rather small pool of potential customers. Not so good.
All in all, market research wouldn’t have turned the Zune into an overnight success, but it could have revealed the Zune’s likely failure. Microsoft might’ve avoided wasting time and money, or at least have produced a product people wanted.
Now let’s look at a company whose market research paid off enormously.
Case Study: Finger-Lickin’ Good Market Research
Kentucky Fried Chicken, more affectionately known as KFC, found its biggest market quite a ways from home — China. After opening the first store in 1987, and now with more than 5,600 locations and $5 billion in revenue in 2017, it has been warmly embraced by the country’s new generation. Fun fact: no other foreign fast-food chain enjoys this kind of success. KFC grabbed an 11.6 percent share while McDonald holds only 5.6 percent. The key to KFC’s success? Quite literally, it’s menu!
Just like this guy, KFC knows what’s up. Before entering China, KFC knew their traditional menu loved by so many in the United States wouldn’t work at all in the new territory. So a complete overhaul was initiated, creating a menu unlike anything in the US. Options such as shrimp sandwiches, matcha ice cream, congee, and soy sauce wings allow KFC China to cater to the new audience’s tastes and preferences. In a country where others were struggling to find decent footing, KFC trumped them all, thanks to a deep understanding of the market need.
https://www.superteam.io/wp-content/uploads/2018/10/st_blog_final_importance-of-market-research.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-11-03 16:01:012019-05-08 21:52:50The 7 Deadly Sins Of Startups: Lack Of Market Need — Importance Of Market Research
What does management mean and the effects of poor management? For Henri Fayol, the famous French founder of modern management methodology, it is “to forecast, to plan, to organize, to command, to coordinate and control activities of others.” According to Supper Club, of all the companies that failed from 2011 to 2013, poor management was to blame 50% of the time. How do companies succumb to poor management? Let’s take a deeper look to find out.
How The Effects Of Poor Management Impacts A Startup
A report from the Chartered Management Institute (CMI) was able to establish clear links between poor management and startup failures. Here we list some of the ways management can be the cause behind the death of a startup.
Founders: A founders influence on the fate of a startup is hard to overstate. Disagreements amongst cofounders can result in one or, in many cases, multiple founders leaving which results in almost certain death of the business. Founders may have great ideas and limitless ambition but lack fundamental management ability. With a diverse range of responsibilities such as planning, organizing, staffing, and directing, management becomes complicated and easy to mess up. Additionally, many startup founders or small business owners do not have formal management education or training, making them even more susceptible to mistakes.
Poor decision making: Every decision has consequences. A string of consistently poor choices can culminate to technical debt and in the collapse of a company. It’s not just about consequences, however. Slow decision making can result in valuable opportunities slipping away. Ideally, decisions should be made promptly near the point of action and only by qualified personnel.
A myriad of additional reasons: Bad staffing practices, inefficient organizational structure, lack of quality leadership, and ineffective communication all have their roots in poor management.
What Are The Qualities Found In Effective Leadership?
We’ve talked about bad management practices. What about good ones? Here are some signs of healthy management:
· Consistent, constructive feedback · Investment in the success and growth of subordinates · Strong leadership by example · Efficient utilization of resources · Delegating tasks to the proper employees · A purposeful vision for the future · Openness to a delegation of tasks and trust of team members · An authentic care for team morale
Case Study: Pan American Airways
Once the largest airlines in the United States, the once-iconic blue logo now shines as a reminder for the pitfalls of bad management. How did Pan Am, the largest international air carrier from 1927–1991, fail? A long string of poor business decisions by the management led to its downfall. Critics say that after the departure of Juan Trippe, the company started going downhill. A decline in the quality of customer service was the first sign. Foreign travelers began to avoid flying with Pan Am, and eventually, even Americans followed suit.
In 1980, Pan Am bought National Airlines for its North-South routes but made a series of mistakes. For one, they grossly overpaid for the acquisition due to a price war with another airline. Pan Am also bought a number of aircrafts that were not compatible with their operations. Finally, they failed to create a strong domestic hub. The whole deal was hasty and poorly handled.
Despite managing to eventually sell Pacific Division at a good price to settle debts, they were never able to capitalize on the sale due to painfully slow decision making. All this combined with their inability to adapt to changes in regulation, the crippled company crawled to failure.
Case Study: The Toyota Way
How did Toyota, at one point the largest car manufacturer in the world, manage to rise to the top? It had a system in place, designed to provide employees with tools to improve their work. These 14 principles are known as the ‘Toyota Way’:
Base decisions on a Long-Term Philosophy, even at the expense of short-term financial gain
Create a continuous process flow to bring problems to the surface, eliminating waste through the process of continual improvement
Use ‘pull’ systems (where a process signals the demand to its predecessor) to avoid overproduction
Level out the workload to create consistency
Build a culture of stopping to fix problems, to get quality right the first time
Standardize tasks & processes for continuous improvement and employee empowerment
Make problems visual so they cannot be hidden
Use only reliable, thoroughly tested technology that serves your people and processes
Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others
Develop exceptional people and teams who follow your company’s philosophy
Respect your extended network of partners and suppliers by challenging them and helping them improve
Go and see for yourself to thoroughly understand the situation
Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly
Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen)
Bringing it all together
Many startups have failed due to the limited management abilities of the founders and leaders. Whether from internal conflict, poor strategy, or just a general lack of vision, if leadership cannot provide a strong foundation, failure is all but inevitable. However, with knowledge, cooperation, and strategy, leadership can inspire team members to grow and excel through leading by example.
https://www.superteam.io/wp-content/uploads/2018/12/st_blog_final_the-effects-of-poor-management.png375710Daniel Jameshttps://www.superteam.io/wp-content/uploads/2019/04/Superteam_Logo-1.pngDaniel James2018-10-30 15:59:302019-05-08 21:52:43The 7 deadly Sins Of Startups: The Effects Of Poor Management
A recent study conducted by CB Insights analyzed the post-mortems of 101 failed startups. Roughly a fifth of these startups failed due to the competitive landscape. Although competition isn’t necessarily always a startup killer, failure to adapt in a competitive landscape can mean certain death for your company.
When facing a lot of direct competition, there are certain steps you must take to cement your market standing. Failure to do so could seal your company’s fate amongst the 90% that never make it. To stand out from the crowd, one must offer something new or something much better than what already exists. Taking your competitors into account and developing a proper marketing strategy is crucial. Perhaps most importantly, the product must be priced just right. This becomes more complicated as competitors attempt to undercut each other in an effort to lure customers.
If you’re a pioneer and first to the market, you’ll need to take a different approach. You need to make it hard for potential competitors to enter the market by creating barriers to entry. These include patents, government rights, access to specific distribution channels, economies of scale, etc.
While ignoring the competition is a recipe for disaster, obsessing over it is not healthy either. The mission should be to provide as much value as possible to the customer. As long as you can find better ways to give more to your customers, you will have a bright future ahead.
Case Study: Failing To Adapt To Competition
What happens when a company fails to properly respond to market competition? It could lead to massive debt and eventual collapse. The massive toy store chain Toys-R-Us in late 2017 experienced just this.
It began with a 10-year partnership with Amazon wherein Toys-R-Us would pay Amazon $50 million a year plus a percentage of sales to serve as the exclusive vendor. Due to the success of the partnership, Amazon began allowing other toy vendors into their ecosystem. Ultimately, Toys-R-Us sued Amazon and attempted to launch its own website to sell toys online. By this time, it was already too late. Toys-R-Us failed to establish its own online presence and couldn’t compete with other online retailers’ prices. The plummeting sales and mounting debt left Toys-R-Us with no choice but to file for bankruptcy in late 2017.
Failing to adapt to competition without a roadmap can also mean failure. It is important to have technical expertise in assisting you with your plans and goals.
Case Study: Staying Focused And Coming Out On Top
In a market completely saturated with powerhouse players like Microsoft, Apple, and Google, one humble company managed to beat them all. We’re talking about online cloud storage service Dropbox. How did they manage to come out alive and on top in a market that took so many startups to the grave?
Dropbox launched in 2007 with the Minimum Viable Product (MVP) which was enough to capture many hearts. The founders continually improved their product by seeking out and responding to feedback. Dropbox offered an abundance of value by providing 2GB of free storage. This led to millions of users joining the platform and establishing Dropbox as the leader in the space. Despite the competition, they were able to position themselves above the rest through excellent execution. Sticking to that attitude, Dropbox has reached a current valuation of over $10 billion.