Market Overview

Number-One Reason Your Startup Will Fail

Think your business is destined to be the next big thing? Think again.

It turns out that most entrepreneurs go into business without the right mindset -- or the right purpose.

"Today, with 12% to 16% unemployment, the real rate of unemployment, everybody's out there saying, 'I can't get a job, I'm just gonna start a business,'" Brett Golden, the president and co-founder of The Chart Lab and Chart Lab Pro, told Benzinga. "I think that's pursuing it in the wrong way."

That, however, is far from the only mistake young entrepreneurs are making.

"The thing is, you have to solve a real problem or else you don't have a real business," said Golden. "I think that's a problem with a lot of these businesses out there. Like you saw [with] Instagram."

Golden is amazed by Instagram, a company that has been extremely successful (in terms of users, not in money earned) despite not solving a "real problem."

"But they were disruptive to Facebook (NASDAQ: FB) and Facebook thought they were a real threat," said Golden. "Okay, that's fine. But I think to really -- if you're not an Instagram and you don't get that type of traction that quickly -- I think you really need to focus on solving a problem. Because if it does [solve a problem], the word of mouth will spread about how your product is helping them, and I think that's key."

Getting it Right the First Time

When starting a new business, Golden said that there are a few things you should focus on.

"First and foremost, if you actually get it off the ground, customer service is the most important thing -- besides, obviously, having the product," he said. "When I try to get back to someone within a half an hour, no later, when they have a question, typically I get an e-mail back saying that the response time is incredible. I'm a stickler for that because I have found that typically I am always e-mailing into outer space on the Internet. It's just a pet peeve. I find that you will be rewarded for your customer service in your response time."

Golden said that if you don't have an original product or concept, "then customer service is even more important."

"Don't initially worry about throwing a lot of money at marketing and advertising," he added. "I think you [should] build the product, beta test it, and make sure there's a need [for your product or service]."

Further, Golden noted the importance of perseverance. "It sounds stupid and redundant, but if you don't have a passion for it, it's very hard to be successful because there's so many roadblocks and obstacles -- so many days where you can get down," he said. "You have to be passionate because how else do you push through that barrier to get through to the other side? I think everybody starting a business -- a lot, at least -- are passionate."

Follow me @LouisBedigianBZ

Posted-In: Brett GoldenEntrepreneurship Success Stories Be Your Own Boss Startups Small Business Tech General Best of Benzinga

 

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