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Homepage > News > Business > Why startups fail: The dangers of building backwards We’ve all heard the statistic that 9 out of 10 startups fail. While this happens for numerous reasons, I believe one of the biggest—and least discussed—is that many founders make a critical error on day 1 of running their business: they build backwards. In my opinion, building backwards creates a direct path to becoming part of that failure statistic. Building backwards is not only counterproductive but also very difficult to recover from unless you have a significant amount of time and money. Unfortunately, many startups still fall into this trap, even though it’s easily avoidable. What does “Building backwards” mean? Building backwards happens when startups jump straight into creating a product without verifying if there’s actual demand for it. Founders often get a business idea and immediately start building, believing they are meeting a market need, instead of first testing the waters to see if anyone is willing to pay for the product they want to create. When you bypass that crucial first step—validating the problem and understanding your customer base—you’re essentially building in reverse. It’s like constructing a house before confirming the land is stable. This approach misses a crucial aspect of business development: building something that meets real demand, not just an imagined one. I touched on this concept briefly in “6 Essential Lessons for Startup Success,” but it’s such a widespread issue that it warrants its own exploration. The risks of building without market validation At its core, a successful business earns more than it spends, preferably with enough profit to pay those who own and operate the business a livable wage. To achieve this, a company must offer something people want badly enough that they are willing to pay for it—this is one…

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Filed under: News - @ November 6, 2024 8:28 am