Kevin Mulleady Weighs In On the Tech Startup Failure Rate
In 2018, the tech startup failure rate was 63%. For such a promising place to be, it’s led to a lot of disappointment for many people. Kevin Mulleady, founder or co-founder of multiple successful companies, weighs in on what’s happening within the companies that fail and provides tips about preventing collapse.
The Mindset
Kevin Mulleady specializes in biotech, finance, and investment. He points out that part of the problem is that there’s a push for people to be their bosses today. It seems that everyone, everywhere, wants to abandon their 9 – 5 so they can take charge of their lives and their careers.
Mulleady says that, while this is an admirable goal, the long-term aspirations often don’t recognize what it takes to build a business from scratch. To be fair, this is true for every industry, but it can be especially challenging to get started in technology today. Because there are so many players who have come to dominate the industry, trying to squeeze into such a cluttered landscape has proved to be nearly impossible for many.
What people tend to remember when they forge their own path are the success stories. There are plenty of people who, despite the odds, stumble onto immense profits almost right at the get-go. They end up ignoring the failure rate entirely or telling themselves that those who failed are nothing like them. The confidence can lead to overspending at the beginning, which can land a company in hot water faster than they thought possible.
The Wrong Market
The virtual world opens up doors to billions of people. This is theoretically a huge opportunity, but in practice, it can lead tech companies to choose the wrong target market. If they can’t narrow down who their audience is and give definitive reasons why they should be interested in the product or program, a tech company might waste a lot of time continuing to hammer home a message that ultimately isn’t connecting.
Kevin Mulleady says that he understands how intuitive it can be to think broadly. After all, if you can appeal to a wide swath of people, it will lead to that much more traction. He says that in some cases, though, you’re better off being more niche — at least at first.
Not an Expert
People without a lot of experience in technology can counterintuitively make their fortunes in technology. Much like the entrepreneurs who land success almost inadvertently, it’s possible to strike gold regardless of your expertise or specialty.
However, in the tech field, it’s more likely that you’ll be swallowed up by the bigger fish who began with the right skills and the right team. Kevin Mulleady says that there’s a lot to be said for hiring experts if you’re not an expert. However, if you don’t know the field at all, you’ll have a hard time spotting someone who does. Resumes and references don’t always tell you the real story of what it’s like to work with someone or how innovative they are when it comes to solving problems. If you’re starting without a lot of capital, it will be that much more difficult to get people on board. Tech professionals are in-demand, and their average salaries reflect it.
Kevin Mulleady on Preventing the Cycle
Mulleady has been an investor for much of his career, and it’s his job to assess the real value of a product or service. He has to look past the numbers to what someone really has to offer. After so much back and forth, he stresses the importance of researching who you want to market to and using resources carefully. Above all else, he thinks that all entrepreneurs should set measurable, attainable goals along their journey. If there’s no way to track progress, then it will be easy to unexpectedly hit failure without even realizing it.