The reality is stark.

Most startups struggle in their first year.  Many don’t make it through their second.

We’ve discussed a number of important reasons this happens, which include:

• Lack of market need for the product.
• Poor timing for the product release.
• Inability to develop a unique value proposition and communicate it in a clear, concise manner.

Each of these are serious issues that can derail a new business.  In many ways, they interconnect.

As does another issue we’d like to point out.

New businesses don’t talk to customer/potential customers enough.

A peculiar thing happens to many entrepreneurs when they see an opportunity in the market or come up with an innovative idea for a product or service.

They become hermits.

They retreat behind their screens and bury themselves in the work of planning their business without considering one of its most important components:  the people who will buy the product.

A wise man once said:

Markets are conversations. 

One of the most important early steps you can take when developing a marketing strategy is to have a dialogue with real customers.  Find channels that work for them (personal meetings, emails, surveys, social media, etc.) and start to gather info on how they’ll respond to your offer.

We’re talking deep dialogue.  Become your version of Oprah and interview some people.  Ask probing questions that get to what they really care about.  Ditch your biases and preconceptions and see things – as clearly as you can – from their perspective.

This can save you a lot of pain down the road.

The authors of the book Nail It, Then Scale It put it succinctly:

“Which would you rather do — talk to customers now and find out you were wrong or talk to customers a year and thousands of dollars down the road and still find out you were wrong?”

It’s easy to fall in love with your product idea when that “ah-ha” moment hits.  In your enthusiasm, you dive into the work of developing your product, getting funding, and creating marketing collateral.  You might even start doing searches for that Ferrari you’re going to buy…

But you’ve missed a key step.  You have to learn to communicate with your customers.  Their input is probably the most important data you can obtain as you plan out your marketing strategy.

As you gain empathy and understand their motivations, a couple of important things will happen.

First, you’ll discover how to communicate your unique value proposition in a way that connects with your audience.  You’ll be clear, concise, and compelling.  You have to make sure the people you’re communicating with get what you’re saying.

Second, you’ll be able to make data-driven assumptions on whether people are willing to spend their money on your offer.

This second point is vital.  Many businesses develop an innovative idea and UVP,  but they miss the most important step.  That is, they fail to accurately find a market fit where money actually gets made.

If you’re going to fail at all, fail fast.   Discover if it seems like you’ll have a viable revenue stream as early as possible, not years later with thousands invested that you can’t recoup.

In the book Delivering Happiness Tony Hsieh writes about his early days with Zappos.

At first, Tony and his co-founders surveyed people and saw they might be willing to buy shoes online, but there was a lot of grey in responses so they weren’t sure about it.  So they ran a quick test.  They put up a website with images taken from the shoe manufacturers’ websites, added buy now buttons and ran ads to drive traffic.

To their delight, they got orders.  Then, somebody would dash to the local shoe store and buy the shoes at full retail, then hurry back and ship them out.

Did they lose money on every order?  Yes.  But did they also learn whether they had viable business idea?  Yes again.

They learned about their customer’s behavior before they had any inventory or fulfillment capabilities.

How well do you know your potential customers?  Have you talked with them, discovered their needs and evaluated their opinions?

How certain are you that people will spend their money on your offer?

You can’t answer that question with 100% certainty.

But you also shouldn’t be leaving it to chance.

Talk to your potential customer and get to know them well.  Test your sales process and make sure revenue streams are part of your planning.

Many startups fail before they get through their second year.  But there’s a lot you can do to avoid becoming one of them.