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Why Most Startups Fail Before They Start

There are more legitimate startups (or stratups” as my former client says) every day but most are doomed even before the owner decides to look around for free design and content for his/her success and nothing can stop that speeding freight train of incompetence and lack of understanding reality!

Image credit: artequip


It’s Business… With Business Costs!

As with any business venture, it takes research, planning and a “roll-with-the-punches” ability to understand the need for change as fast as one can when the target audience demands it. Most MBAs know that. But, with all the talk on Facebook and stories of internet millionaires, people seem to think there’s a 60mps highway to overnight success. Being the psycho magnet I am, both with women and clients, I can honestly say I have seen some of the worst examples of planning, or rather no planning on the parts of excited and clueless entrepreneurs.

Perhaps you’ve been the victim of a startup that fails to start… or pay? I learnt very quickly to spot the red flags, as they were usually shoved into my eye sockets by those who were either too far in the stratosphere to come down to Earth and the law of gravity or those who believed themselves smarter than the “artsy-guy” they would get work from for “peanuts.”

The “Fastlane”

Lately, with my reputation with design and tech blogs, I receive a disturbing amount of contacts from startups that ask me to write for them… after I write ABOUT them for my blogging clients (they’ll talk about design later). The money will, of course, be discussed later.

Firstly, it’s unethical to use such connections for personal gain. Yes, I have spotlighted some great apps, software and other things that serve the readers (usually with other options of the same ilk wherever possible) but to ask for such a thing (many blogs do “sponsored posts” -- advertorials of a sort with a small disclaimer attached) is ridiculous and slimy. Secondly… it just doesn’t work!

The ridiculous belief is that kissing up to a similar, larger blog or website will kindle a friendship that evolves into kisses and hugs, long walks on the beach and the larger site constantly linking back to the startup. NOPE!

Then there’s the search for virality. Creating content that will, like a recent video or meme, be shared by a hundred million users because that happens all the time. Personally, excluding kitten and puppy videos, there’s only 193 viral content pieces on the internet that keep going around via Facebook and Twitter.

The Finances

An office, computers, furniture, a location in the best part of town (because internet clients drop by all the time for face-to-face meetings) and a much needed company car for $80,000 to “keep up appearances” cost a startup a lot of capital, so why would some “designer” expect to be paid? Startups that demand free work will never respect you or their customers, so that’s a big red flag.

As one failed attempt to come to a contractual agreement brought out the best in startup business ethics, I tried to create a laundry list of tasks against a fee. The startup, in the end, made one addition to the contract. It said, “and anything else we deem necessary.”

I believe they call that, “SLAVERY!” At least they had money but they just didn’t feel like parting with as much of it as I wanted. I joked that this contract term would keep me working until the day I died (legally, it DID!). I did, however, through the back and forth of negotiating, learn more about their business ethics… which were non-existent.

Obviously it didn’t work out and they never launched. I suppose there is a designer out there still crying about the unpaid bill or legally dead promises of “future work and millions of dollars for everybody!”

I have found that one simple request for startups without capital for design separates the serious startups from… are there serious startups when it comes to paid design work? I tell them that their promises of future money, success and inclusion as their creative director can easily be contractual by giving me a percentage of the company they want me to gamble my time and money upon. No one has ever gone for that.

Be Realistic!

One startup “idea guy” contacted me while I was working fulltime and pitched an idea I thought was completely stupid. It cost me a lunch hour (he was buying) to listen to his pitch. I was going to do everything. I gave him a figure for me to quit my job and work on his idea. He didn’t blink. I was shocked he didn’t react like a crazy person. Later I would find out THAT was his psychotic reaction – a quiet, slow burn.

He called me the next day to ask if I would allow three payments over a period of time, rather than an upfront retainer of one payment. I didn’t know what to say. I didn’t think it would go this far. I didn’t want to quit my job but I had quoted him a high price and it looked like he was going for it. Then came the meeting with his partner.

We went to a very ritzy highrise in Midtown Manhattan and the front desk concierge told us the partner was coming down to meet us. This building was so high class, there was only a big stone slab in the spacious lobby and that’s where the shorts and T-shirt wearing partner had us sit for our meeting.

He didn’t mention my fee but kept telling me what an “honor” it was for me to have his partner interested in working with me. After a bone-crushing hour of sitting on a stone slab, twisting my spine to look at each partner on either side of me, I said, “well I’ll get started once I have your cleared check!”

A week later the young partner called me and asked how long it would take me to have the website put together (lots of illustrations had to be done first as content). I reminded him that I had to be paid, the illustrators had to be paid and then everything could be put together in about a month.

I explained the logistics and why it would take a month but he claimed it was too long and I blew my chance. Played to the end I expected.

As with all startups who approach me, I check their URL every now and then to see if they were successful and should I kick myself. In every case, they never launched but this one site actually did… a year later, although filled with lots of “coming soon” pages. It stayed that way for a couple of years until I guess they didn’t want to pay for hosting any more.

The lessons in how not to start a website business were an everyday occurrence. Here’s a step-by-step list of how to spot an incompetent startup by their actions:

  1. They don’t have a business plan in place BEFORE obtaining funding so everything is covered.
  2. The owner can’t decide who will do what. If two or more people are posting on the startup social media accounts, chances are one of those people has a problem relating to people and will post insane things, hurting the brand.
  3. They publish the website before everything is in place! Launching too soon and continuing to build their site while people visit is dangerous. On the site I worked with, the owner kept adding guides in niche interests, while the social media drew traffic to the site based on the promise there was something for everyone. People who went to the site and found information for three minor niches and not the one they wanted went elsewhere and will NEVER RETURN!
  4. An MBA from Full Sail University means nothing. I fell asleep on my keyboard once and when I woke up I had an MBA from an online university. If the owner doesn’t listen to the experts he/she hired and lets them do their jobs, then how successful can their startup ever be?
  5. The owner has a brilliant idea of paying “top bloggers” to mention the website as a way of getting around the ethics of a website that values its trusted professional reputation among its loyal followers. It won’t work and the website name will get around as a “shifty site.”
  6. They buy followers for Twitter or “likes” for Facebook. It’s only trouble in the end. If going for quality followers, rather than a quantity of followers made up of spammers, scammers, and 13 year-olds looking for follow numbers is the way they are going to build a following, remember that it’s better to have 500 followers that listen to messages, posts/tweets than 10,000 that are made up of 9,000 inactive accounts, 500 people selling followers, 100 or so followers who only tweet quotes from dead people and 400 totally unrelated followers that have no interest in the website.
  7. The owner is impatient! Success takes hard work, dedication and constant evolution. Will the owner foolishly think his/her business is at a point where he/she believes everything will run itself? Page ranking can drop in a matter of hours. With great content, more and more people will come to the site. It takes years – not weeks or months for the average business to start to really find it’s audience and success. Anyone who tells you it’s not the case doesn’t know what’s needed. RUN!


The internet has made more millionaires in ten years than all of U.S. history (and without the “robber Baron” attitude), so everybody wants to get on board. There are over a million “How to Start Your Own Blog” websites out there, promising the sky and only delivering hot air. People dream, hope and look for the easy way to succeed. They need logos and web design, apps and other delights only a professional designer can provide… and they all want it for free. The wrong people are becoming millionaires!

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