Of course, it’s clearest when you’re not selling. “Then the market says thank you, but I don’t pay for your product,” says Michael Callas, co-founder of StepOne.

Or, okay, you’re selling, but you’re not meeting your sales projections. “You have to analyze the reasons a priori and in detail. With absolute certainty, the value proposition isn’t consistent, meaning you’re not adding value, you’re trying to sell something your customer doesn’t appreciate. And this is very serious,” stresses business creation expert Joan Riera.

Another reason, according to this expert, would be that sales cycles are longer. “You think you’re going to sell very quickly and customers need more time to think about the fact of purchase or the need to purchase that service or product because it’s not essential (especially businesses) and it takes longer sell”, points. So instead of selling in three months, it takes 10. “They’re not telling us they don’t want it, but it’s going to take longer to market.” And you have to analyze that, because it involves big changes in the development process, in the costs, in the search for financing, etc.,” he adds.

Another problem is the lack of customer loyalty in the medium term, i.e. they buy from you once, they are satisfied, but they do not repeat it or do so in the long term. “The problem there is that we’re not able to build lasting relationships,” says Riera.

Or that the costs are very high. “Costs are skyrocketing and that has to do with not taking into account margins. And they are very important in the start-up phases. Sometimes we design models that are value for money and with the satisfied customer, but when we produce that value our costs skyrocket. When we analyze, we see that the margins are too fair and we click. It’s as if the apparently working engine suddenly ran out of power because it was losing gas. And to solve it, you need to invest more resources, which in most cases you don’t have,” warns the expert.

As Enrique Penichet, Head of Business Booster Accelerator points out, “If your model is making money from day one and you notice sales dropping, you’ll notice the slowdown right away.”

Patricio Hunt, managing partner of Accelerator Intelectium, recommends not wasting money on unsuccessful strategies in online marketing, especially in e-commerce. “The most typical mistake is when you invest, for example, 200 euros to acquire a customer that leaves you with a life cycle margin of less than 100. It’s bad practice if you’re investing in marketing activities and not analyzing the investment equation versus customer lifecycle cost. The mistake is capture at all costs”.

“The Fairy of Users”

Javier Megías, co-founder of StartupXplore, adds another one he calls “the fairy of users”: “It’s the idea that we’re still not clear how we’re going to make money, but if we have enough users, we will.” the fairy is coming, touch her with her magic wand and we will start earning it”.

In that sense, says Megías, another red flag is when the team cares a lot about costs and little about generating revenue. “Or those who haven’t thought well about how to get customers. They had to prove very well that the channel they are going to use exists and works and they will be able to attract them. Trying is wonderful, but since we’re not rich, first think about who your early adopter is, who you’re going to start working with. And when you’ve tested it enough, there’s time to expand the laser beam to shoot at more potential customers,” says Megías. Another sign is when there are no competitors, or they say there aren’t any: “If anyone points this out, they’re either lying or haven’t studied the market well. The best thing is that there is competition because that forces us to be a lot more vigilant,” says Callas.

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