Setting up a business was never been easier, but you can spoil it very fast – and for various reasons. You have the funding, you have the ideas, and you have the zeal. But, none of this ensures your startup will survive in today’s ultra-competitive business environment.
Most of the startups (almost 50%) fail because there was no market demand (like Hailo – the on-demand taxi application) but what about the others? Here is the failure story of a social media app “YikYak” to make you understand that the industry buzz and a large user base don’t really ensure success. To be successful you also have to increase the revenues and profitability of your business alongside providing a phenomenal experience to your users from day one.
Let’s first put some spotlight on the brighter side of YikYak:
YikYak was a social application for Android and iOS that enabled users to make and share posts anonymously with any individual who was inside a 5-mile radius. Users inside the range could also see, like or dislike the content anonymously. The application was especially trending in schools and colleges, frequently utilized for gossiping and sharing updates or events.
The app was valued at $4oo million in 2014 after raising more than $73 million in only 3 rounds of funding. At its peak time of success, the app was considered as the darling of the anonymous messaging space. In 2017, the application closed its doors. Here are the reasons behind its demise.
You think your idea is cool. Its bright side will never let you think about its dark side. But, as an entrepreneur, you have to look at both the side and create a balance to manage and handle things properly.
Yes, fundraising is important for every startup to expand the customer base and grow talent. But, the growth of the business is something else and equally important. We should directly relate the growth of our business to profit and revenue in order to maintain positive cash flow.
In this highly competitive business world, your challenge is to differentiate yourself to guarantee you stand apart from your rivals. Therefore, always have a unique selling point in your business and never ever lose that.
Making a sustainable business model and the product helps manage burn rate and find approaches to achieve key objectives. Your business should always have a sustainable business model. Facebook was valued at $1 billion when Yahoo tried to acquire it. Rather than selling, it figured out how to monetize and became profitable.
What can you learn from the failure of YikYak? Well, for startups, focus on every one of the details! If you consider starting your own business, you should remember about the key positions. Legal issues, gathering new users and generating revenues may turn out to be difficult. But, you have to learn from the failures and proceed ahead with confidence!
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