Young software companies compete with their MVPs to establish themselves on the market in the long term. To achieve this, digital innovations are constantly being improved and further developed. Despite an impressive business case, many fail in this attempt. In this post, we want to look at 5 challenges that cause many innovations to fail.
There are numerous reasons why digital inventions fail to generate revenue. Here are 5 reasons why so many products and services fail:
1. NO MARKET ANALYSIS
Start-ups that do not conduct thorough market research do not fully understand their target market or the competitive landscape, which can lead to failure. It has been proven that most projects fail due to lack of demand. Success here is synonymous with the number of people who have a tangible benefit from your solution.
2. INADEQUATE FINANCING
Start-ups often require considerable financial resources to get off the ground and grow. Due to frequent wrong decisions (e.g. regarding employees), the funds provided are often not sufficient to cover the increased costs.
3. POOR MANAGEMENT
The wrong team or ineffective team management leads to communication breakdowns and can result in a complete halt to growth. Investors often withdraw their trust from project managers and founders at this point.
4. STRONG COMPETITION
There may be other companies or products that offer similar or better solutions to the problem. It can also be difficult to market digital products if competitors have easier access to skilled labor (e.g. India, China) or simply have more budget.
5. NO SALES STRATEGY
Technology companies that do not have a clear plan for generating revenue or a solid business model can find it very difficult to survive in the long term. Those that fail to make their products or services visible to their target audience can consequently remain undiscovered. Without a proper sales concept, it is virtually impossible to market the solution in a scalable way.
CONCLUSION
There are numerous other factors that can contribute to digital inventions being discontinued, and it is often a combination of several of these factors that leads to these failures. To save you a lot of insight, we have developed a clear step-by-step guide ("Sales Framework") to help you implement sales processes efficiently, generate new revenue and win satisfied customers.
