Sometimes the best way to learn how to do something is to learn how not to do it — how and why those who have tried before haven’t succeeded. With that in mind, here are three typical reasons that most startups never reach seven figures, and how you might avoid those same mistakes.
- They run too few experiments. The only way to know which changes you should keep is to consistently employ A/B tests, split tests and surveys, and then to learn from the changes you’ve made. Next move? Keep what works and throw out what doesn’t.Unfortunately, most entrepreneurs take that advice lightly — they launch their business and cross their fingers, and that’s it. Businesses that reach seven figures, however, keep learning, iterating and running experiments, which propels them into a more informed, and therefore profitable, future.
- They don’t focus on little wins with compounding results. The best thing you can do is focus on little wins and the positive payoffs from small product iterations and marketing changes. You could, for example, change the sales copy on your website to increase your conversion rate by 5 percent. And maybe you could also build a more persuasive sales funnel, which could further increase your conversion rate by 6 percent.
- They don’t remain agile and flexible. As The Motley Fool reported, Jim Keyes, the past CEO of Blockbuster, said in 2008, “Neither RedBox nor Netflix is even on the radar screen in terms of competition.” One has to wonder… did he really believe that? Or was he just too unsure of how Blockbuster could possibly change from its then-business model into something else?