Successful Life Sciences startups have been responsible for many groundbreaking and life-changing works in the modern age. However, the glamor of success makes people blind to the struggles that come with starting a business.
That said, we have listed down the nine common reasons why Life Sciences startups fail and how you can avoid it:
Wrong Industry, Wrong Application
Although the life sciences industry is already a niche industry itself, it’s still a huge industry. Therefore, if you don’t niche down or adequately prepare to commercialize your life science startup, you won’t sell.
Many brilliant minds made groundbreaking discoveries and believed that it could shake the market. In some cases, they are probably right. However, all that time spent on developing the product usually doesn’t apply to their ideal market research.
That’s where they start to fail.
You have to show a use case and profitable business model if you want your startup to succeed. Even if they have people who want what they can give, it will all come crashing down if they don’t know how to bridge that gap with their business application.
Lack of Planning
No matter how good your marketing may be, if your product or service is not of high-quality, it’s not going to last. However, if you rely only on the excellence of your startup idea, product, or service, it’s also going to fail.
That’s why if you want your startup to be a success, you have to create a business plan.
Your business plan should help you figure out your steps as a startup during the early stages of its founding. The product or service idea that you offer is one part of the business plan.
Too many startups launch their business without having a business plan, which is entirely possible. However, that means that you’re going to have to shoot from the hip every time you need to make significant decisions in your business. And this can happen many times, especially during the early stages.
When you have to do things on the spot, it will be exhausting, demoralizing, and time-wasting. You can avoid all of that by merely crafting an actual plan.
Insufficient Funding
Funding is one of the most significant issues that destroy life science startups from all over the world. That’s why you want to make sure that you properly prepare against it.
There are multiple ways that insufficient funding can manifest itself, not just in the lack of capital to start in the first place. That’s one thing that startup founders fail to realize, too. Reaching your financial goal for capital does not guarantee success. If anything, it’s the start of more financial problems to worry about coming your way.
Hence, you will need a life science investor who can guide you on making plausible financial projections. This includes knowing how much your product or service is worth. Moreover, you should be aware of your startup’s financial situation.
Pricing Issues
When pricing your offer, you don’t want to price it too high and alienate your target audience out of buying it. You won’t sell enough, and you’ll close down. You also don’t want to price it too low that you end up not making enough money.
Besides knowing your product’s worth, it would be best to study your competitors and the market’s state. When you do your research, you’ll have a more realistic way of pricing your products.
Miscommunication
When it comes to life science startups, things can get quite complicated. A minor issue can snowball into something big if you’re not careful.
For example, a slight miscommunication can cause your whole operation to stop.
That’s why it’s crucial to have protocols, formalities, and a system in place. Doing can prevent miscommunications that could halt your business operations and cost you money.
Dishonesty
Investors can help fund your startup, and they can also provide you with smart business advice. Hence, you must treat them with respect and not insult their intellect.
You can do this by being honest with them. This includes not sugarcoating your products or service’s features.
If you get too comfortable with dishonesty, your business isn’t going to last. It may even end up incurring irreparable consequences if you aren’t careful.
Therefore, you should be as honest, straightforward, and transparent as possible. Your investors can see through the smoke and mirrors anyway.
High Competition
Many startups start and end worldwide, and believing that you won’t run into the competition is foolish. That’s why you should incorporate market and competitor research when making your business plan.
The startup scene may be a breeding ground for innovation, but there’s also ambition and competition. That’s why you want to have as many advantages as possible, and information is one tool you need.
Even if your startup isn’t operating within an overcrowded market, it’s still crucial to do your due diligence and research your competition.
Poor Marketing and Sales Strategy
Sometimes, the only difference between you and your competition is how you market and sell your services/products. How you brand your startup and approach customers can make or break your business’s success, no matter how brilliant you believe it may be.
That’s why you should also take into account marketing and sales strategy.
Even if you’re a startup, it doesn’t mean that you won’t have the budget for marketing, advertising, and sales. You should incorporate your marketing budget in your cost analysis of the business.
The Myth of Silicon Valley
Silicon Valley has been the home of many successful venture-funded entrepreneurs. No wonder it has inspired many to create startups themselves.
However, it’s important to note that many of these ventures are either in the software niche or are selling consumer gadgets. Startups in the life sciences industry will have different challenges than these niches.
Most of the time, it won’t be cheap to start a life science startup. Plus, production is a different problem in itself.
That’s why you shouldn’t fall for the allure of Silicon Valley success and keep yourself grounded in reality.
Conclusion
Starting a Life Sciences business can be challenging. So much so that it can test the limit of your psyche and expertise in the field.
That’s why you have to prepare for many eventualities to ensure that you persevere enough to succeed.
By keeping in mind these common mistakes in running a Life Sciences startup, you should be more informed and aware of avoiding them.
