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Expect a few pitfalls when starting a new business, from a technology learning curve to the challenge of cracking the profitable code of customer acquisition. However, it is often the obstacles you least expect that will creep up and wreak havoc in your most vulnerable moments. As an entrepreneur who has experienced all of the following firsthand (sometimes with staggering consequences), I urge you to heed my warnings and prepare for the unexpected, starting with these five harsh realities that can creep into your business at any time. moment.
1. Your most trusted channel can backfire
I recently came close to acquiring a company, until I made a disturbing discovery: More than 90% of their customers come from one channel, and it’s one they barely control. This deciding factor brought me back to a few years earlier, when one of my own companies had relied on the widely-touted strategy to triple what works.
In theory, it makes sense: if you know which marketing channel generates the highest returns, you should go for that path to maximize the success of your business.
Actually, there is a big problem: once you trust a single thing, person, strategy or platform too much, you create a huge vulnerability. Your silver bullet could soon become your Achilles’ heel if the trusted channel suddenly disappears, changes, or becomes less trustworthy.
The answer here is simple: diversification insulates companies from devastating vulnerabilities, and while it may seem counterproductive to invest in lower ROI activities, it will pay off to build a stronger, more defensible company.
Related: Risky Businesses: Should You Diversify?
2. Viral success has a tricky downside
One of my clients’ businesses experienced a huge viral success, with a hilarious video that became a whirlwind of front page press and the debut of Shark Tank. His company went from a few sales a week to thousands a day, quickly surpassing six figures in monthly sales without spending a dollar on paid marketing. It was a true Cinderella story for her business, but she forgot one thing: even Cinderella had an expiration date, and when the clock struck 12, her carriage turned back into a pumpkin. This entrepreneur, however, never expected the viral press and millions of free eyeballs to dwindle quickly.
Despite his company’s rapid rise, he had to figure out how to recapture lightning in a bottle and deploy it again and again, once the novelty of the media frenzy wore off. Unfortunately, that’s exactly what business requires, and few entrepreneurs realize that the highs often have a cliff to the bottom.
The best bet is to take action, creating a post-viral conversion plan where you reuse your coverage and newfound social proof in various cross-platform marketing campaigns. Nothing stays viral forever, but using virality as credibility-enhancing assets can significantly boost your future marketing efforts. If you have it, show it off!
3. Imitators can poison your potential buyers
I recently answered the phone from an enraged customer who demanded a refund within hours of their purchase for future service. My heart sank instantly as I feared that some scurrilous article or explosive smear campaign must have detonated on the internet, smearing my company’s reputation and thus scaring the customer. Within 30 seconds of his call, I realized that was far from the case.
This client was spooked, but not by a smear campaign; instead, it was an overnight copycat that set off alarm bells for him. She mistakenly believed my company was a fake copycat, even though a quick internet search would reveal years of our results, track record, and reputable customer testimonials.
To be fair, their confusion turned out to be a big deal: if this copycat competitor successfully confuses our audience, and in some cases mystifies them, then they may actually be doing something right. At least we could be doing something wrong.
We heard his criticism, as he explained why he preferred the copycat, his reasons ranged from its website animation to the brand’s color scheme and the faces reflected in its marketing. Even through his condescending tone, this client offered valid feedback for our team to objectively assess and, in some cases, incorporate.
Imitators may appear that challenge, strengthen or damage your brand. Ignoring or insulting them doesn’t make your company stronger or theirs weaker. Instead, consider whether there is any truth to a customer’s comparative perception of your company and theirs. Even angry customers and competitors can offer valuable insights into how your business compares. No offense; to improve.
Related: How to Maintain Your Top Market Position in a Copycat World
4. CEO status does not build trust
You may think that the term “CEO” on your LinkedIn profile is an automatic symbol of credibility and trustworthiness, but your customers probably think differently. If you have a relevant industry background or impressive credentials, that’s great, but as a CEO, you also have one unbreakable factor that debunks all of the above: bias.
Just because you founded the product or know your service inside and out doesn’t mean you have to be the customer-facing salesperson. In fact, an employed or commission salesperson may not fare much better. If you want to establish trust and strike a chord with customers who have never heard of you, tapping into testimonials from ordinary, close people who don’t have a stake in every sale provides far more effective marketing than a CEO on a soapbox.
5. You may start to dislike your own baby
In the process of creating a product or service to solve their customers’ problems, many entrepreneurs neglect an underrated consideration that can rear its ugly head and rock your entire world: Are you building a business you even like?
Building a successful or profitable business is an impressive achievement, but sometimes it takes months or years to realize you’ve built a business you don’t even like. To avoid this success-destroying realization, take time early on to assess the lifestyle, long-term bottom line, and day-to-day operations of the business you’re building. The moment you resent your business, it can do you more harm than good, and vice versa.
Related: Study Shows Entrepreneurs Really Love Their Business Like Their Children