What the Reason Most e-Commerce Development Startups Fail?

Unlike the last 10 years, nowadays every college graduate has a dream career. The trend of e-commerce development has increased in today's era. The popularity and success of many e-commerce portals have shaken everyone from their slumber. Now traders want an e-commerce website of their own and start their own online business.

Every e-commerce website has some do’s or don'ts, some ethics, rules and limitations, which everyone should understand and follow. Because just getting a website up and running is not the end. Despite this, it is the beginning of a new innings. To simplify your tasks, we have prepared a complete list which will not only tell you the basics but will also make your life easier.

Reasons Why Most Online Businesses Fail

According to studies, 75 percent of enterprise-backed startups fail. This data is based on Shikhar Ghosh's study of Harvard Business School. 77 percent of the capitalists surveyed believe that many start-ups lack pioneering innovation based on new technologies or unique business models. Which causes them to fail. 

A start up is also an organization that may be agile, mean and hungry at first but the organization is nonetheless. Some of its stages are as follows -

At Planning Stage

Know Your Customer

You cannot persuade anyone what they want or need to buy. Until you clearly understand what you really want from your customers. Thus a start up like other business enterprise is trying to fulfill the needs & desires of the customer and for which the customer is willing to pay now or at a future date.

In the case of free services like Facebook or Gmail, customers do not pay anything. The customer is willing to compensate in one way or another by informing them of the searches and browsing habits used for targeted marketing.

Building Wrong Product

The important thing is that all products are incomplete because there is always a stress between the customer as to what he values ​​and what businesses want to charge for it. At the end of the day the product needs to be able to achieve profitability while meeting customer expectations. Keep in mind that customers pay more for a better customer service. For example Friendster, MySpace, etc. who lost to Facebook, even though these sites benefited for the first time and were highly followed. One reason for the failure of these sites was the page loading time. Since these sites offered to upload music, songs etc. It took more time to load the pages and they did not even have a Facebook button.

Business Model Failure

Business models that do not have a demonetization plan and when it exists are inadequate. Generally if a startup is profitable, it can survive for the first 5 to 10 years. Even when a startup is able to make money like any other business, it must continue to strengthen itself to gain new products and market share. Examples of Yahoo and AOL being very successful companies in its first 10 years but not in the next 10 years.

No Market Need

This is the biggest reason that startup fails. According to an analysis of 101 startup post postmortems, 42 percent of startups failed. Despite all the confidentiality concerns, email services are a very small part of paid email services by providers.

Product Development stage

User Interface (UI) / User Experience (UX) Issues

Designing UI/UX is essentially a problem-solving approach specific to design. This involves assessing known aspects of the problem and identifying more ambiguous factors that contribute to the conditions of a problem. This contrasts with a scientific approach where concrete and known aspects are tested to arrive at a solution.

Design Thinking is an iterative process in which knowledge is constantly questioned and acquired so that it can help us redefine a problem in an effort to identify alternative strategies and solutions. Which may not be immediately apparent with our initial level of understanding. Faster failures in a test group and environment are the best way to achieve the user interface, user experience (UI) and design required for (UX).

Mistakes Businesses make while Executing their Online Marketing Plan

Online marketing is a set of tools and methodology used to promote products and services through the Internet. Online marketing encompasses a wider range of marketing elements than traditional commercial marketing due to the additional channels and marketing mechanisms available on the Internet.

At Execution Stage

Poor Management Team - negative traits that would mean a founder would not get good results from employees.

• Reducing a crystal-clear focus - Very few managers use their time effectively. They think they are participating to suppress matters, but they are really just rolling the wheels. Focused managers are not reactive, they have a laser-like focus to view a task.
• Lacking Organization - Knowing how to run the show so that nothing goes out of sync and your team should not be confused about what they should do. The delegation has to assign ownership of a project as a whole. If you do some work, it can cause confusion as to who is responsible and thus lack accountability. When team members feel that they have full ownership of a project, they work hard towards making it successful.
• Not clearing organizational debt from time to time - Organizational debt is the compromise of all people or culture, which is done in the early stages of a startup to ‘just get it done '. Organizational debt can turn a growing company into a nightmare. So clear the organizational debt from time to time.
• Pay attention to detail during the hiring process - When you are starting a business, hiring the right people can make or break a company. If the sales executive cannot hit the target, the marketing manager's campaigns have no impact, then you have to pay all the salaries and no return on that investment. The pit of money from a bad hire becomes deeper with each moment. The person is in the role due to the cost of all those opportunities that are missed and made mistakes.
• Employees who have previously worked with startups or are willing to work in startups - If your starting unit can operate and deliver on a shoestring budget, you'll get a winning team. The reason for this is that it is always a better idea to hire people who have prior startup experience so that they can grow the business organically using budget marketing techniques like social media and SEO. If they only know how to work with big brands and big budgets, they will constantly find excuses not to work.

Running out of Cash

It is estimated that 70–75 percent of venture-backed startups will not have the money returned by investors, more than half of whom have nothing.

Despite the fact that cash is the life-flow of a business. The fuel that keeps the engine running - most business owners don't really have a handle on their cash flow. Philip Campbell, a CPA and former CFO, author of Never Say - Cash Out. Poor cash-flow management today is causing more business failures than ever before.

Tips to help get your business on the path to financially successful growth:-

• Your first priority should be to control spending
• Rainy day reserves are always a good idea
• Get help managing money
• Keep your spending priorities straight
• Get money you have owed as soon as possible

No cash flow

Profit does not equal cash flow. You can not only see your profit and loss but also keep a hold on your cash flow. Your cash flow includes many other financial figures receivables, inventory, accounts payable, capital expenditures, and debt service.

A secret that very few business owners have discovered, knowing whether you made a profit? It is not the same as knowing what happened to your cash?

Profit, as defined by accounting rules, is revenue income expense. Creating a customer invoice for the products or services you sell creates revenue. Actually collecting money on that invoice is cash.

A positive cash flow is required to generate profits. You need enough cash to pay your employees and suppliers so that you can make goods and provide services. It is the sale of goods / services that help to generate profit. You need to structure your business so that your company can have a positive cash flow in order to grow positively and increase profits.

Poor Inventory Management

Lack of inventory balance makes product shortages and overstocking unavoidable. Valuable time and capital are being spent completing tasks that a system could manage. When you lack liquidity, an inventory management system introduces you that your location is cluttered and difficult to operate effectively.

Remember that most successful startups do not have inventory. Ola does not have its own taxi, BnB does not have hotels and Ali Baba does not keep the product list. In businesses where inventory is required, simply the timing system of inventory with higher accuracy is better than most systems unless the business model or logic determines otherwise.

Too Much Competition

If a startup does not know its competition and they are against it, they will eventually find themselves in hot water. 19 percent of startups told CB Insights that this happened to them because of not taking the competition seriously.

Your enterprise is highly likely to be out-marketed by others. Contestants who are playing in the field like you will not give up easily. The combination of factors such as expertise, product and funding can lead to a start up success and loss to others.

Product Problems

It’s crucial that your process provides a solution. The features that enhance this solution are welcome. But if you don't solve the problem - the whole product is nothing. It is important to remember that interaction design and visual design can make something beautiful. It is meaningless without the product being useful.

A basic product is best for driving problems against vision or purpose.

• This product is as follows: (Your audience)
• This will help them to solve this problem: (Problem)
• We will: (strategy)
• We expect a working product: (purpose)

Once you meet this definition, you can then proceed to solve the problem, make a decision about adding or replacing a feature.

Market Problems

Market problems are the stated or silent problems of your target market. This may refer to existing inefficiencies, awkward workflows or non-optimal solutions. The key to finding a market problem is to listen to the frustrations, or "only if" statements that arise during the interview.

In the startup industry, you will find that not only is the direction and vision of your company constantly changing, but the market as well as new opportunities and threats will begin all the time.

Marketing, Controlling and Exit Stage

Poor Marketing

One of the most important elements of a successful business plan is a well-researched marketing plan. It starts with market reaction and competitive analysis. Once you have a clearly defined target customer, you need to design a marketing campaign that turns it into a paying customer.

Disharmony Among the Team and Investors

Stress and conflict are important characteristics in dynamic, successful businesses. But if unresolved, this discord can lead to slow decision-making, laxity, frustration arising from direction, commitment to employees, and performance.

If an enterprise is performing well, many times issues can be pushed into the background for several years, until a reputable or liquidity event occurs. These types of issues occur more often when a start-up is thinking about a tie-up. Gets out of business or stabilizes and control issues need to be resolved.    

Ignore customers

Once a startup becomes self-sufficient or stabilizes its business model, acquiring venture funding for growth and contingencies it has often been seen that startups can also be caught with technology or stock market valuations and this process may ignore customers.

When you don't aggressively validate your market, you can't make a good product. Without measuring, trusting numbers, tracking, validating, and optimizing the data received from your customers, it is not possible to create a viable product or make frequent and customer-centric updates.

Similarly, Woertide wrote,

"We weren't spending enough time talking with customers and rolling out features that I felt were great. But we didn't collect enough input from customers. It was too late when we realized it. Then It has not been done. It is easy for you to calm down. You have to focus on your customers and adapt to their needs. "