Having stumbled upon Failory.com, a site hosting failed business stories, I couldn’t pass up the opportunity to analyse and collate the reasons behind their misfortunes.
So why do businesses fail?
Luckily failory.com provides a handy drop-down menu to pick “mistakes” and sort the list. At first glance it’s a surprise, the mix is almost even between all the tags. Intuitively I expected the vast majority to fall under the “bad marketing” tag, which is not the case. Only 7 out of the roughly 40 stories have the “bad marketing” tag.
However when looking closer and actually reading the stories it becomes clear that even if the tag was not used, the marketing was at fault in some major way in most cases.
Barring a few exceptions like capital and supply-chain issues, most of the stories center around three main problems:
- Lack of, or bad strategy
- Lack of MVP validation
- Marketing & Branding mistakes
The sad thing here is that all of these could have easily been prevented at the founding and launch stages. Brand & business strategy services for small businesses and startups are so, so very important.
One of the stories concerning WURA, “The Nollywood Netflix” has its failure tagged as “Big Competitors”. It cites YouTube as its source of failure.
Reading further however that’s not the case. The reason for failure was signing non-exclusive agreements with content creators. Of course YouTube will win if you allow the content you pay for to be hosted everywhere. Netflix, HBO and Amazon have exclusives for a reason. This could have been easily prevented by just someone casually glancing at it from a brand strategy perspective.
Another example is Ink, an online contracting tool for freelancers. The mistake tagged is “bad marketing” yet the real issues go so much deeper than just failing to market it.
Simply Ink failed to build a product for its users. It had no brand except for a vague idea and it tried to design a product without consulting with the potential user base. In essence everything was done backwards. The product was built before the core of the brand and the product were established by client audits. This led to the product not being interesting for its targeted user-base.
Which is a shame, because a competitor product called Prospero exists and is growing just fine. But Prospero was designed and is being led by a brand strategist who did the legwork of actually establishing UX and a customer persona (he even details some of the journey on his vlog).
Spot the difference
All of the above could have been found out during a good brand strategy session. Brand strategy doesn’t just define your look and feel. It tries to poke holes into your business model to find the weakest parts. We are here to FORTIFY. There is a reason why we came up with the name.
We routinely validate MVPs “by accident” when asking tough questions about customers and their journey. We poke holes into your strategy to shake up your business and see what’s loose. And we are able to routinely spot misconceptions or half-truths when running marketing ops backwards (from a product first, instead of customer-centric perspective).
Branding your business is not just about your marketing or the logo. It’s a holistic vision of the strategies you deploy.
Sure, it’s not a panacea. A brand strategy session isn’t able to validate your supply-chain or get you venture capital. There are a lot of moving parts to your business. But at the very least, we can highlight dangers.
And looking at the failory.com list it does seem like these dangers are responsible for at least 80% of failure-states for businesses and startups.
Why do businesses fail? Because they are afraid to invest in this when they start out.
Time and time again we hear the same story: “I wished we invested in strategy when we started out and still had the money”.
The further into your operations you go, the harder it gets for the business to carry that investment and the less of a return it provides.
Don’t make the same mistakes, fortify.
Also published on Medium.