While time is high that Arabs and Emiratis start a business, as Muhammed Bin Rashid Establishment- an establishment focused on SME development in UAE region is working hard towards providing a favorable environment to budding entrepreneurs and reduce their chances of failure admirably. Mohammed Bin Rashid Establishment has also created new companies law which allow entrepreneurs to start their company with least capital necessities. UAE has witnessed success of many startups from successful entrepreneurs like Acadox and Ananasa but there are many businesses that failed miserably like GoNabit.
Here are five reasons why startups fail to sail their boat and drown that you must consider prior to becoming an entrepreneur.
BuildingÂ AÂ Wrong Product:
It does not really matter how innovative you are, if you build the wrong product that your customers do not want then you are destined for disaster. Furthermore, if you offer solution to a trifle problem rather than a major issue then your product will fail to get their attention. A great example is Wizards productions that stumbled after modifying one of its popular games. Arabianhitman whose founder was Sohabi Thiab gained immense popularity from fans and went on to revamp the game by adding functionalities that users did not even need.
Lack of competitorâ€™s knowledge:
The companies that are already there and established will not have a difficulty in knocking you out of the game if they want. Consolidate your presence through detailed and in depth competitor SWOT analysis so you know what strategies to adopt and what strategies to discard. Going in the arena without knowing the opponentâ€™s technique and tactics of attack will lead you with ultimate loss. Hence it is crucial to know who your direct and indirect competitors are and how they entice customers to buy their offerings. Peter Thiel, co-founder of PayPal states that we better ask ourselves what we are doing different from others and if someone is incapable of doing it better then what exactly is our differentiation tactic to win the market?
Lack Of Counselling:
Â It is great to do what you want to do but a piece of advice from others helps immensely. Counselling helps in taking into consideration the neutral point of view as your own approach can be biased. Bointi is a startup forum in UAE that seeks to provide a platform to all those looking to start a business. It helps them in counselling and taking better decisions regarding managing finances, marketing and sales, administration and other crucial aspects. So, a trait that differentiates successful entrepreneurs from unsuccessful entrepreneurs is their lack of counselling attitude.
Short Term Approach:
As Adam Dâ€™Angelo, co-founder of Quora states, â€œFocus on long term and always do whatâ€™s right to grow the company and not make short-term decision. And outlast everyone.â€ This is also what happened to GoNabit which was MENAâ€™s daily deals site that was acquired by living social within a year of its launch. They failed to address the long term vision and focused on short term approach. They did not foresee the effects of their present decisions on companyâ€™s future and their strategies were for short term success rather than long term success.