Founders Survivors Bias
Founders Survivors Bias
Authored by - FW$ for Entreprenuers, Because its all about Freedom.
Publication: September, 15th 2024
In this Article we cover,
- BLA as a key metric for your business success.
- Statistical Truths about Business Life Cycle for the first 10 Years of a business. To read now scroll to the 2nd half of the article.
- Bonus Online Only section Mistakes Founders Make in the First 10 Years
Did you know, in 2023, over 5.5 million business Registration applications were filed in the US alone, setting a record for the third consecutive year. View in Browser for a better view (includes the Online-only Bonus section of Mistakes Founders Make in the First 10 Years: Marketing and Sales Pitfalls, in the 2nd half of this article).
(BLA) Business location awareness poses significant challenges, particularly for small to medium-sized enterprises (SMEs) and startups, as they navigate optimizing both online and offline visibility. Several key statistics highlight the difficulties businesses face in this domain:
Lack of Accurate Business Listings: A study by Uberall found that 80% of consumers lose trust in local businesses if their online information is incorrect, including business hours, phone numbers, and addresses. This illustrates the importance of having accurate and consistent listings across platforms like Google My Business, Yelp, and social media.
Consumer Expectations and Mobile Searches: According to Google’s data, 30% of all mobile searches are related to location, and 76% of people who search for something nearby on their smartphone visit a business within a day. Businesses that fail to optimize for local search miss out on these potential customers, showing the critical need for proper local SEO.
Challenges with Location-Based Marketing: In a survey by Street Fight Insights, 67% of businesses stated that measuring the effectiveness of location-based marketing was a significant challenge. Many companies struggle with integrating location data to target potential customers effectively, thus losing out on market share.
Inconsistent Information Across Platforms: The Local Search Association reports that 56% of local businesses have missing or incorrect information across online platforms, which can deter potential customers. Maintaining consistent, accurate data across all digital touchpoints is a significant ongoing challenge for many businesses.
Increased Demand for Hyper-Local Marketing: As more consumers rely on hyper-local marketing (geofencing, location-based notifications, etc.), 47% of companies report difficulties in harnessing location data to improve engagement and personalize content, according to a study by Location World.
Survivorship bias skews your judgment by focusing solely on successes while overlooking failures. This can lead to the mistaken belief that following the strategies of successful companies or individuals guarantees success. However, many other businesses or entrepreneurs may have taken the same steps but did not achieve the same results. Understanding why those attempts failed is just as crucial as studying successes, as it highlights key factors that contributed to their downfall.
According to our research, we found that a founder who isn't satisfied with what they have yet ignores new tools or technology that could help them improve is often referred to as complacent or resistant to change.
Complacent: This describes someone who may be too content with their current situation and is not motivated to take advantage of new opportunities or advancements that could lead to better results.
Technophobic or change-averse: These terms can describe someone who resists adopting new technology or methods out of discomfort or fear of the unfamiliar.
Stagnant: This could describe someone who avoids growth and innovation, leading to a plateau in their potential success.
FreeWebsiteSite.com can significantly help businesses increase their local customer base and boost net profits through enhanced business location awareness and a strong online presence. Here are the ways it can achieve this, you can also view our social learning channel on YouTube for easy to follow videos 🪂 content:
1. Local SEO Integration
- Location-based SEO: FreeWebsiteSite.com allows businesses to optimize their websites for local SEO. By using region-specific keywords, creating local business pages, and adding Google My Business integration, businesses can rank higher in search results when local customers search for relevant services or products.
- Google Maps integration: Having a website optimized with location-based SEO enables businesses to show up in “near me” searches on Google. This means that people searching for services or products in their geographical area are more likely to find the business. Did you know that you can change your Google Maps location in seconds using FW$ Smart Plugin, quite handy if you are someone who moves often and would like your customers to know your new locations.
2. Mobile-Friendly Design
- Most local searches are done on mobile devices, especially by customers looking for nearby services. FreeWebsiteSite.com ensures mobile-friendly templates, which Google also favors for local SEO rankings, thereby increasing the likelihood of local customers finding the business.
3. Customer Reviews and Trustworthiness
- Businesses using FreeWebsiteSite.com can integrate review widgets and customer testimonials, which are critical for building trust with local clients. Positive reviews can directly lead to an increase in foot traffic or calls from nearby customers, improving both sales and long-term customer relationships.
4. Business Awareness through Blogs and Content
- FreeWebsiteSite.com enables businesses to host local blogs and content marketing efforts. By creating blog posts about local events, partnerships, or community involvement, businesses can create more local engagement and attract customers interested in the area.
- Sharing success stories, local collaborations, and news further builds a connection with the local audience, which can result in more referrals and repeat customers.
5. Geographically Targeted Ads
- Businesses with a FreeWebsiteSite.com platform can easily integrate with Google Ads or Facebook Ads to run location-specific digital marketing campaigns. Targeting ads to local customers drives more traffic to the business and leads to conversions from those within a certain radius, improving local customer acquisition.
6. Contact Information and Local Listings
- Websites on FreeWebsiteSite.com can prominently display contact information, address, and operating hours, which are essential for businesses looking to attract local customers. The inclusion of features like click-to-call or click-to-map makes it easier for customers to reach or locate the business.
7. Cost-Effective Marketing
- A professionally designed website eliminates the need for expensive traditional advertising. Businesses can invest in digital marketing strategies (SEO, content, social media) that deliver measurable results with a higher return on investment. This contributes to increased net profits by saving costs on print ads, flyers, and other traditional methods while attracting local customers.
8. Improved Business Legitimacy
- Many consumers expect a business to have a website. Businesses that lack an online presence may seem less legitimate. A well-designed website on FreeWebsiteSite.com conveys professionalism, which can enhance trust with the local audience and ultimately drive sales.
9. Analytics and Conversion Tracking
- Businesses using FreeWebsiteSite.com can track visitor data, monitor how local customers are interacting with their site, and refine their marketing strategies using built-in analytics tools. This helps optimize the business for better local performance by focusing on the most successful traffic sources.
By leveraging these tools on FreeWebsiteSite.com, local businesses can improve visibility, increase customer engagement, and create a seamless experience for local consumers. This leads to higher conversion rates, enhanced brand recognition, and ultimately, a boost in net profits.
These statistics underline the critical role of accurate location awareness and visibility for businesses, especially in the digital age, where consumers frequently rely on online searches to find local services or products. Solutions like consistent local SEO strategies, precise online listings, and effective use of location data are necessary to overcome these hurdles.
For businesses not addressing these challenges, the cost can be significant in terms of lost traffic, potential sales, and long-term customer trust. This is where FW$ comes in. Our digital marketing services are allotted for our customers. Customers must meet certain criteria to be inducted into various levels of services. Starting from basic which includes annual digital audit where our digital marketing engineers check for inconsistency and create a report for management review. To ultra competitive services that seek to build a hyper local marketing circuits that connect all sources of potential leads and then cross pollinate them to maximize exposure among other secret services that we do not disclose to the public due to existing NDA (non-disclosure agreements) with our service providers.
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Here's the big deal. Most managers and even founders become complacent and often live in survivors bias. We at FW$ dont mean to knock you on the head but see for yourself what the reality of a companies LiveCycle is. Did you know what are the chances if you sky dive that you would land in a non-hazardous spot. The percentage of businesses that close within the first year in the U.S. has remained relatively stable over the past few years, although there is some variation depending on economic conditions. Here are the key statistics:
First-Year Failure Rate:
- According to data from the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail within their first year. This statistic has been fairly consistent over the years.
Five-Year Failure Rate:
- Over a five-year period, 50% of small businesses close down. By the ten-year mark, about 65-70% of businesses have ceased operations.
Survival Rates Across Industries:
- The first-year survival rate tends to vary slightly across different sectors. For instance, the healthcare and social assistance industry has one of the highest first-year survival rates, while industries like construction and transportation tend to have higher failure rates.
Effects of the Pandemic:
- The COVID-19 pandemic significantly impacted small businesses. During 2020, there was a spike in closures, with some estimates suggesting more than 25% of small businesses that were temporarily closed during the pandemic ended up shutting down permanently.
These figures indicate that while most businesses survive the first year, there are still considerable challenges ahead as they grow and scale. Factors such as industry, location, access to capital, and economic conditions can influence these survival rates. Freewebsitesite.com is in constant pursuit of fine tuning our work shop and tools available for entrepreneurs to one-up their game to compete and win their market.
Sources:
- U.S. Bureau of Labor Statistics (BLS)
- Fundera Reports on small business survival rates
Here is the bonus online section (Not included in our Newsletters) Mistakes Founders Make in the First 10 Years: Marketing and Sales Pitfalls
We have created a timeline you may find interesting for the first 10 years, and depending on where your company is, you may be able to glean from this and watchout, lest you fall in the same mindset that costs you later dearly.
Launching and growing a business is a challenging endeavor. Founders often face numerous hurdles, especially in marketing and sales, where missteps can significantly impact growth and sustainability. Understanding common mistakes made in the first decade can help new entrepreneurs navigate these challenges more effectively. Below is a timeline highlighting key marketing and sales mistakes founders make in the first ten years, supported by statistics and sources.
Years 0-1: Neglecting Market Research and Undefined Target Audience
Mistake:
Failing to conduct thorough market research and not clearly defining the target audience.
Impact:
Without a deep understanding of the market and customer needs, marketing efforts become unfocused and ineffective, leading to wasted resources and missed opportunities.
Statistics:
- 42% of startups fail because there's no market need for their product or service.
- Source: CB Insights, "The Top 12 Reasons Startups Fail," 2019. Link
- 56% of startups believe that defining a target market is critical to their success.
- Source: Statista, "Key Challenges for Startups Worldwide," 2020. Link
Explanation:
Founders may rush to launch their products or services without validating the demand. This oversight can result in offering solutions that customers don't need or want. As FW$ is a marketing tool we should point out that though an often neglected area for entrepreneurs from the non-tech industries, it is perhaps the most make or break decision you would make. Market research must include you knowing which tool is the best for your business because either going with the wrong option or not going with anything at all can cost you dearly. Read up on our other articles to learn what to look for and how FW$ can help you in extraordinary ways by the quality, ease of use, in-built advanced tools like google analytics, in-built SEO, Payments and e-commerce and many more great tools that you may not understand fully now, but to have them accessible and through a platform that envisions enabling entrepreneurs like no one ever has, which includes tech support to get your first cut website complete quickly, and train you to self manage the tools and align your websites online branding trajectory and scaling it with your business. No neglected, not wastefully overspend your precious resources. Enough said.
Years 1-2: Underinvesting in Marketing Efforts
Mistake:
Allocating insufficient budget and resources to marketing due to cost-cutting or undervaluing its importance.
Impact:
Limited brand awareness and customer acquisition hinder growth and competitiveness in the market.
Statistics:
- Companies that allocate at least 10% of their revenue to marketing are 3 times more likely to achieve their growth goals.
- Source: Gartner, "CMO Spend Survey," 2018. Link
- 14% of small businesses fail due to poor marketing.
- Source: Fundera, "Small Business Marketing Statistics," 2020. Link
Explanation:
Without adequate investment in marketing, businesses struggle to reach potential customers and fail to build a recognizable brand. FW$ augmented services offer entrepreneurs who are looking to scale additional services like advanced SEO, digital marketing including paid advertising, and engaging in certified 3rd party service providers who have IDIQ type contracts with FW$ under which they are required to provide tested and structured services at exclusive prices via FW$. Join us today, and reap the benefits on day one, year 10, and beyond.
Years 2-3: Ignoring Digital Presence and Online Marketing
Mistake:
Not establishing a strong online presence or utilizing digital marketing channels effectively.
Impact:
Missed opportunities to reach a broader audience and engage with customers in the digital space where they spend significant time.
Statistics:
- 81% of shoppers conduct online research before making big purchases.
- Source: RetailDive, "Consumer Shopping Trends," 2019. Link
- Small businesses with websites experience 25% more growth than those without.
- Source: Deloitte, "Small Business Digital Transformation," 2018. Link
Explanation:
An online presence is crucial for visibility and credibility. Neglecting digital channels limits customer reach and engagement. If you have read the mistake 1 and 2 explanations above, you would not commit the 3rd thou shalt not when it comes to being an entrepreneur. If you skipped it, go back and read it again. And you know, prevention is better than cure. Take steps today so you don't make these mistakes down the line if you are just starting. If you already have been in business for multiple years, read on and see how you could re-calibrate your trajectory with us.
Years 3-4: Inconsistent Branding and Messaging
Mistake:
Failing to maintain consistent branding, messaging, and visual identity across all platforms and materials.
Impact:
Creates confusion among customers, weakens brand recognition, and reduces trust and loyalty.
Statistics:
- Consistent brand presentation increases revenue by up to 33%.
- Source: Lucidpress, "The Impact of Brand Consistency," 2019. Link
- 90% of consumers expect a consistent experience across all channels.
- Source: Salesforce, "State of the Connected Customer," 2018. Link
Explanation:
Consistency reinforces brand identity and helps build a strong, recognizable presence in the market. One of the key selling points for FW$ is it being the only mobile friendly web editor we made with you in mind. We know who are real customers are. Being able to update your website images, texts, messaging, branding on the go. That's what sets you apart from your competitors. While others may stick bulky WordPress or self-limiting options or hiring a oh so not-available web developer or freelancers. Our team will show you how exactly you can not only manage and update your website from your laptop, but also how easily it can be accomplished right from your phone.
Years 4-5: Overlooking Customer Relationship Management (CRM)
Mistake:
Not implementing CRM systems to manage customer interactions and data effectively.
Impact:
Leads to poor customer retention, missed upselling opportunities, and decreased customer satisfaction.
Statistics:
- Increasing customer retention rates by 5% increases profits by 25% to 95%.
- Source: Harvard Business Review, "The Value of Keeping the Right Customers," 2014. Link
- 73% of customers say that friendly customer service reps can make them fall in love with a brand.
- Source: HubSpot, "Customer Service Expectations Survey," 2019. Link
Explanation:
Strong relationships with customers drive repeat business and referrals, which are essential for long-term success.
Years 5-6: Neglecting Data Analysis and Metrics
Mistake:
Making marketing decisions without leveraging data analytics to understand performance and customer behavior.
Impact:
Inefficient marketing strategies persist, leading to wasted resources and missed optimization opportunities.
Statistics:
- 64% of marketers strongly agree that data-driven marketing is crucial in the economy.
- Source: Forbes Insights, "Data-Driven and Digitally Savvy," 2019. Link
- Companies using data-driven strategies drive up to 8 times more ROI.
- Source: Aberdeen Group, "Data-Driven Marketing," 2018. Link
Explanation:
Data provides insights into what works and what doesn't, allowing for informed decisions and better ROI.
Years 6-7: Failing to Adapt to Market Changes
Mistake:
Not adjusting marketing and sales strategies in response to evolving market trends and consumer behaviors.
Impact:
Leads to outdated practices, loss of relevance, and competitors gaining market share.
Statistics:
- 70% of companies that fail to adapt to market changes do not survive more than a few years.
- Source: McKinsey & Company, "The Adaptability of Companies," 2019. Link
- Agile organizations are 1.5 times more likely to outperform their competitors.
- Source: Project Management Institute, "Pulse of the Profession," 2018. Link
Explanation:
Staying attuned to market shifts ensures strategies remain effective and competitive advantages are maintained.
Years 7-8: Overemphasis on Sales Without Marketing Alignment
Mistake:
Focusing heavily on sales tactics without aligning them with marketing strategies.
Impact:
Creates disjointed customer experiences and reduces the effectiveness of both sales and marketing efforts.
Statistics:
- Misalignment between sales and marketing costs businesses $1 trillion a year.
- Source: HubSpot, "The State of Inbound," 2018. Link
- Companies with strong sales and marketing alignment achieve a 20% annual growth rate.
- Source: Aberdeen Group, "Sales and Marketing Alignment," 2016. Link
Explanation:
Collaboration between sales and marketing ensures cohesive messaging and a unified approach to customer acquisition.
Years 8-9: Neglecting Content Marketing and Social Media Engagement
Mistake:
Underutilizing content marketing and failing to engage with customers on social media platforms.
Impact:
Reduced brand awareness, customer engagement, and missed opportunities for lead generation.
Statistics:
- Content marketing generates 3 times as many leads as traditional marketing but costs 62% less.
- Source: Demand Metric, "Content Marketing Infographic," 2016. Link
- 54% of social media users use platforms to research products.
- Source: GlobalWebIndex, "Social Media Trends," 2018. Link
Explanation:
Engaging content and active social media presence attract and retain customers, fostering loyalty and advocacy.
Years 9-10: Not Investing in Marketing Automation and Technology
Mistake:
Failing to adopt marketing automation tools and technologies that streamline processes and enhance efficiency.
Impact:
Inefficiencies persist, scaling becomes difficult, and opportunities for personalization are missed.
Statistics:
- 80% of marketing automation users saw an increase in leads, and 77% saw an increase in conversions.
- Source: Invesp, "Marketing Automation Statistics," 2018. Link
- Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads.
- Source: Business2Community, "Marketing Automation ROI," 2017. Link
Explanation:
Automation enables personalized marketing at scale, improves lead management, and enhances customer experience.
Conclusion
The journey of entrepreneurship is fraught with challenges, but being aware of common marketing and sales pitfalls can make a significant difference. By prioritizing market research, investing appropriately in marketing efforts, establishing a strong online presence, maintaining consistent branding, leveraging customer relationship management, utilizing data analytics, adapting to market changes, aligning sales and marketing, engaging in content marketing, and embracing automation, founders can set their businesses on a path to sustained growth and success.
References
- CB Insights, "The Top 12 Reasons Startups Fail," 2019. CB Insights Report.
- Statista, "Key Challenges for Startups Worldwide," 2020. https://www.statista.com/
- Gartner, "CMO Spend Survey," 2018. Link provided in PDF sent to FW$ customers
- Fundera, "Small Business Marketing Statistics," 2020. Link provided in PDF sent to FW$ customers
- RetailDive, "Consumer Shopping Trends," 2019. Link provided in PDF sent to FW$ customers
- Deloitte, "Small Business Digital Transformation," 2018. Link provided in PDF sent to FW$ customers
- Lucidpress, "The Impact of Brand Consistency," 2019. Link
- Salesforce, "State of the Connected Customer," 2018. Link
- Harvard Business Review, "The Value of Keeping the Right Customers," 2014. Link
- HubSpot, "Customer Service Expectations Survey," 2019. Link
- Forbes Insights, "Data-Driven and Digitally Savvy," 2019. Link provided in PDF sent to FW$ customers
- Aberdeen Group, "Data-Driven Marketing," 2018. Link provided in PDF sent to FW$ customers
- McKinsey & Company, "The Adaptability of Companies," 2019. Link provided in PDF sent to FW$ customers
- Project Management Institute, "Pulse of the Profession," 2018. Link provided in PDF sent to FW$ customers
- HubSpot, "The State of Inbound," 2018. Link
- Aberdeen Group, "Sales and Marketing Alignment," 2016. Link provided in PDF sent to FW$ customers
- Demand Metric, "Content Marketing Infographic," 2016. Link provided in PDF sent to FW$ customers
- GlobalWebIndex, "Social Media Trends," 2018. Link provided in PDF sent to FW$ customers
- Invesp, "Marketing Automation Statistics," 2018. Link provided in PDF sent to FW$ customers
- Business2Community, "Marketing Automation ROI," 2017. Link provided in PDF sent to FW$ customers
By learning from these common mistakes and leveraging the lessons learned, founders can enhance their marketing and sales strategies, leading to sustained growth and a competitive edge in the marketplace. Join FW$ today! Because it is all about Freedom.
