What marketplace behavior does your business serve?

In last week’s post, we discussed four key elements that define every business: Premise, Promise, Sidelines and Guidelines.

For me, the most important one is the Premise, or the marketplace behavior the business is serving. Why? A faulty Premise is the number one reason startups fail.

According to CB Insights research, "tackling problems that are interesting to solve rather than those that serve a market need was cited as the No. 1 reason for failure, noted in 42 percent of cases."

Four out of 10 startup businesses fail because of a faulty Premise.

The problem is not limited to startups. Established businesses must adapt their models to keep up with everchanging, volatile marketplace behavior. The recent Toys"R"Us bankruptcy reminds all business owners that a failure to adapt will ultimately lead to a business’ demise.

What marketplace behavior does your business serve?

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