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When you begin a new venture, some pitfalls are expected — from a technology learning curve to the challenge of cracking the profitable customer acquisition code. However, it’s often the obstacles you least expected that will sneak up and wreak havoc at your most vulnerable moments. As an entrepreneur who’s experienced all of the below firsthand (sometimes with staggering consequences), I’d urge you to heed my warnings and prepare to face the unexpected, starting with these five harsh realities that may infiltrate your business at a moment’s notice.
1. Your most reliable channel may backfire
I recently almost acquired a company, until I made one distressing discovery: More than 90% of its customers come from one channel, and it’s one they hardly control. This dealbreaker brought me back to a few years prior, when one of my own companies had relied upon the widely touted strategy to triple-down on what’s working.
In theory, it makes sense: If you know one marketing channel generates the highest return, you should go all-in on that avenue to maximize your venture’s success.
In reality, there’s a major problem: Once you rely too heavily on any one thing, person, strategy or platform, you create a giant gaping vulnerability. Your silver bullet could soon become your Achilles heel if the reliable channel suddenly goes away, changes or becomes less reliable.
The answer here is simple: Diversification insulates businesses from devastating vulnerabilities, and even though it may feel counterproductive to invest in lower-ROI activities, it’ll be worth it to build a more robust, defensible venture.
2. Viral success has a deceptive downside
One of my clients’ businesses experienced a major viral success, with a funny video turning into a whirlwind of front-page press and a Shark Tank debut. His company went from a few sales a week to thousands a day, quickly surpassing six figures in monthly sales without a dollar spent on paid marketing. It was a true Cinderella story for his business, but he forgot one thing: Even Cinderella had an expiration date, and when the clock struck 12, her carriage would turn back into a pumpkin. This entrepreneur, however, never expected that the viral press and millions of free eyeballs would rapidly dwindle to a lull.
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 typically have a steep cliff down.
The best bet is to spring into action, creating a post-viral conversion plan in which you repurpose your coverage and newfound social proof into diverse, multi-platform marketing campaigns. Nothing stays viral forever, but using virality as credibility-enhancing assets can significantly increase your future marketing efforts. If you’ve got it, flaunt it!
3. Copycats may poison your would-be buyers
I recently answered the phone to an enraged customer who demanded a refund within hours of her purchase for a future service. My heart instantly sank, as I feared some libelous article or bombshell smear campaign must have detonated across the internet, defaming my company’s reputation and thus, spooking the customer. Within 30 seconds of her call, I realized that was far from the case.
This customer did get spooked — but not by a smear campaign; instead, it was a fly-by-night copycat who’d raised her alarms. She mistakenly believed my company was the deceptive knock-off, even though a cursory internet search would reveal years of our reputable outcomes, history and client testimonials.
In all fairness, her confusion proved a very big problem: If this copycat competitor is successfully confusing our audience and in some cases reeling them away, then they might actually be doing something right. At the least, we might be doing something wrong.
We listened to her criticism, as she explained why she preferred the copycat, her reasons ranging from their website animation to brand color scheme to the faces reflected in their marketing. Even through her condescending tone, this customer offered valid feedback for our team to objectively assess and in some cases, incorporate.
Copycats may pop up, and they may challenge, strengthen or damage your brand. Ignoring or insulting them doesn’t make your company stronger nor theirs weaker. Instead, consider if there is any truth to a customer’s comparative perception between your company and theirs. Even angry customers and competitors can offer invaluable insights into how your company stacks up. Don’t get offended; get better.
4. CEO status doesn’t engender trust
You might think the term “CEO” on your LinkedIn profile is an automatic symbol of credibility and trustworthiness, but your customers probably think differently. If you have an industry-relevant background or impressive credentials, that’s great, but as the CEO, you also have one unshakable factor discrediting all of the above: bias.
Just because you founded the product or know your service inside and out doesn’t mean you should be the customer-facing salesperson. In fact, an employed or commission-based salesperson may not fare much better. If you want to establish trust and strike a chord with customers who’ve never heard of you, leveraging testimonials from relatable, regular people who don’t have a stake in each sale provides much more effective marketing than a CEO on a soapbox.
5. You may start to dislike your very own baby
In the process of creating a product or service to solve your customers’ problems, many entrepreneurs neglect an underrated consideration that can rear its ugly head and shake up your entire world: Are you building a business that you even like?
Creating a successful or profitable venture 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-shattering realization, take the time early on to assess the lifestyle, long-term outcome and day-to-day operations of the venture you’re creating. The moment you resent your business, you may do it more harm than good — and vice versa.