There’s huge profit potential in selling software or other products online – but despite the potential, many entrepreneurs fail at it. Why? Let’s take a look at 4 of the biggest mistakes that lead to failure for entrepreneurs starting this type of business venture.
1. They Fail to Create a Genuinely Useful Product
If you look at the most successful software and digital product businesses, you’ll find that they have one important thing in common: They offer a product or service that’s truly useful. Don’t make the mistake of developing a product that nobody needs. This is where product innovation plays a vital role. It requires thorough market research and foolproof planning to develop an innovative and valuable software solution.
Your business is far likelier to succeed if you create something that saves people time, simplifies their lives, solves a problem for them, increases their happiness or fills some other genuine need in their lives.
2. They Fail to Develop Standout Marketing
Finding paying customers is one of the greatest challenges in business. It’s easier if you’ve attended to #1 above – creating a genuinely useful product. But it still isn’t easy. Identifying a niche, creating meaningful content marketing, writing blog posts, creating explainer videos, designing landing pages, mastering email funnels, upselling, cross selling, advertising, social media marketing, search engine optimization – each of those things in itself is an art.
To succeed at selling products online, you’ll probably need to hire people who are masters at one or more of these aspects of successful marketing. It is a challenge to find people who have the right mix of skills to market a business well, and many entrepreneurs fail at this aspect of running their businesses.
3. Their Pricing Misses the Mark
If your product is too expensive, you’re going to fail. It’s also possible to fail if your product is too cheap; people may not trust it. Pricing has to be like Goldilocks’ porridge: not too high, not too low – just right.
4. They Don’t Have Sufficient Skills, Funds and / or Tools for the Job They’re Trying to Do
Wouldn’t it be fantastic if you could start the next Instagram or Snapchat? Of course it would – but do you have the coding skills it would take to be successful, or sufficient funds to hire an army of programmers? If not, it would be wise to either gain the necessary skills or raise the funds before launching.
There are some bare minimum essentials you’ll need for success as an online entrepreneur. For example, it’s difficult to have a viable online business if you live in the Australian outback with a spotty or nonexistent internet connection (although connectivity for rural Australians will hopefully improve soon when the NBN rollout is complete).
Funding is another essential for success, as every business requires at least some funds to start. Some businesses, like physical product-based businesses, require a larger upfront cash investment than other types of businesses do. Software development is also a high-cost business if you don’t have coding skills. Starting this type of business requires careful planning or you will quickly run into cash flow issues. Many under-funded startups fail.
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The Bottom Line
These are 4 of the most prominent reasons entrepreneurs fail at developing products that successfully sell online. Before you launch your startup, take an honest look at whether you’re equipped to succeed in each of these aspects of your business; if not, make an effort to overcome each of these possible problem areas so you can succeed where others have failed.