There are many reasons entrepreneurs fail; but these two are by far the most common

Overestimating the response to your product
It is common to believe that your new product or service will be received well by customers; often, their response will surprise you (often, not for the better). Having an overly optimistic expectation for your product can throw off all of your cash flow estimates, and even prevent you from obtaining a single client. When trying to gauge how customers will view your product/service, ask yourself the following questions:

• 1. What important problem am I solving for customers?
• 2. Who is my first customer going to be?
• 3. Where will I find my first customer?
• 4. What will I do if customers don't care for my product? (Adapt it, scrap it?)
• 5. Where will I find subsequent customers?

If you have good answers to all of these questions, you can avoid problem number one. If you can't answer all the questions, that's OK. Now is the time to find the answers to them; it's much less costly to find the answers now, as opposed to later. If you can save yourself 3 months of work on a project that was likely doomed, you can invest those 3 months into a product with a much better chance of succeeding. The second major reason that most entrepreneurs fail is actually an extension of the first problem:

Locating your first real customer
This can't be a friend or family member. You need to locate a real customer, and make certain that they will invest in your idea; they have to agree to pay for it. Having them simply say that they are interested is not enough. By securing a paying customer, you will validate your product's worth in the marketplace. If you can't find a single customer, and you've exhausted all avenues, then it's time to re-evaluate question number 1 above:

What important problem am I solving for customers? Revisit this question, and adapt your product accordingly. Add features, drop features, whatever it takes to make your product viable in the market. You will move in a loop through the two questions that we've discussed.

• Create a product that solves an important problem
• Locating your first real customer (one that will actually pay you)

Continue looping until you have balanced this equation. If customers won't pay for your product, revise the product until somebody will. Note that you need to look hard for customers, but not so exhaustively that you are spending months locating a single customer. You should know where your customers will be located (their industry, company names, names of possible leads), and you should ask them directly. The process should only take a few weeks. Use their reasons for not purchasing your product, and build them into your adapted version. If they tell you that your product only solves half their problem, find out what you're missing, and add it in. Then come back and re-pitch if necessary. This ongoing loop will eventually lead to a product that they will value enough to purchase.

If you can't feasibly meet their needs, or they simply tell you they have no interest in your product, it might be time to throw in the towel, and move on to the next idea. By being agile, and failing quickly (and cheaply), you can save yourself plenty of time and money.

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