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Belfast – A Startup Hub? The Top 10 Reasons Startups Fail

Startup was 2015’s business buzzword. In Belfast alone, 10% of the business community is made up of them.

Ireland has been dubbed the latest tech-startup this side of Silicon Valley. So much so that come November, up to 400 delegates will attend the global Startup Nations Summit in Cork, making Ireland the first ever European host country.

Capital city of the North, Belfast, has been dubbed the 18th Best Place in the UK to start a business.

A 2015 survey by Tech Nation revealed that Belfast is one of the UK’s fastest growing clusters for technology, thanks to the burgeoning number of digital companies that have launched in the city since 2010.

While Belfast has a good number of schemes in place to support start-up entrepreneurs, evidence shows that businesses that start in the city may not make it past a couple of years’ trading. According to the Office of National Statistics, the survival rate of businesses launched in 2009-2014 was 36.7%, lower than the average for Northern Ireland (39.7%).

There are good links for business in our Capital City, with the International airport just 15 miles from the city centre and the Port of Belfast; Ireland’s largest port for importing and exporting goods, a bonus for trade overseas.

In terms of skilled workforce, we also have much to offer. Qualification levels are high in Belfast (35.8% of population are of working age with NVQ Level 4 or above). Conversely, salary levels are below average, which appeals to new businesses.

Despite schemes to support start-up entrepreneurs, evidence shows that businesses that start in the city may not make it past the first couple of years’ trading – the survival rate of businesses launched in 2009 to 2014 was 36.7%, much lower than the average for Northern Ireland (39.7%) – Office of National Statistics.

However those that do succeed, REALLY succeed: More young businesses reach £1m in sales in Northern Ireland than anywhere else in the UK (2011-2014 research by Enterprise Research Centre (ERC)) – Belfast’s 9.7% average for firms reaching £1m in 3 years compares to 7.9% in London, and 6.2% in England overall.

Top 10 Reasons Startups Fail

Yet despite the plethora of ideas, talent and angel investment on the island, very few startups succeed. Even fewer reach the bedroom-to-boardroom mythology of Facebook and Apple.

Recent CB Insights research looked into the top 20 reasons cited by startups as the ultimate cause of their failure.

Number 2 on the list is running out of money. Number 8 is poor marketing. Hiring expensive agencies and consultants to help with that marketing no doubt eats into the vital funds needed to grow startups into successful businesses.

Knowing your target audience, understanding where they are and how to communicate with them in order to convert them to sales leads and ultimately customers, is one of the most important elements of a successful business.

With limited funds, knowing how best to invest them in skilled marketing/PR services could then be vital to helping a startup overcome 2 of the most prevalent stumbling blocks to success. With a range of options from paying a freelancer, hiring an in-house employee, or an agency, how do you choose?

Staying In Control: In-House

This option sounds great but is hugely stressful and time-consuming. The work is varied and requires much more than allowing an intern to populate your social media channels.

This person will come to know your startup inside and out. They will know instantly the brand personality and can be trusted.

Of course the first problem comes with finding, luring away and hiring such talent in an industry that is widely known to be under-skilled (on the Digital end of things at least).

It will be vital that this staff member is experienced. They will be the public face of your baby (i.e. your business).

Once you find this gem, the downside of having a role in-house is that you only get that one person’s experience and skill set. You can’t draw on a team of diverse and experienced people.

And inevitably, ambitious folk will look to move on up the career ladder and, as a small company, you won’t have many opportunities for them to do that. So expect turnover in the role every 2-3 years.

Freelancers & Consultants

This group bridges the in-house and the agency, while providing a middle ground price-wise too.

Consultants operate like full-service agencies, with retainer fees, regular clients and end-to-end delivery.

Freelancers, as a rule, tend to operate on a more short-term basis, consulting their time in terms of hours, days or short projects.

They are obviously a cost-effective option, with the average copywriter or social media manager charging around £25-45 per hour. However they won’t have the time and breadth to get to know your company inside out on a one-off project and so there are certain tasks which may not be suited to them.

The freedom for you comes in the form of being able to contract out different aspects of the work that you can’t do or don’t want to do, without paying an agency or staff member to do everything, and only paying when you need the help.

However, a freelancer is one person, juggling numerous tasks for numerous clients. If you need more support than the few hours a month you’re paying them for, it may be time to call in the big guns…


Agencies, being the traditional model since the Mad Men days of old, remain one of the first go-to options for new or small businesses requiring PR or Digital support.

Agencies provide access to high-end resources and tools. They can afford media monitoring programmes for example, that most small businesses can not.

These organisations have a reputation for hiring the most ambitious, young and hungry folk and they get results alright.

So what’s the downside?

Well you will need to think carefully about how you will manage the relationship with an agency. Are you prepared to feed them regular information and content? Because without it, they will be seriously stunted in their ability to get results for you.

Cost is a big factor too, as agencies will be the most expensive option available to you when outsourcing.

It’s important to weigh up what you will get from a retainer. If you pay a basic industry average of say £1,000 per month, and if it equates to the basic 10-12 hours per month, with an account executive working on it who earns somewhere around £18,000 a year (just under £300 a week take-home) then their hourly rate is £7.50 and you’re paying £100 an hour for it.

But simple maths is a crude way to look at it. The point is, the responsibility lies with you. You need to know what you need. Don’t rely on a agency or consultant eager for new business to tell you what you need. Because undoubtedly they will tell you that you need only what they can give you.

Find the people, not the logo, not the reputation, not the price, but the people who practice what they preach. The people you believe are as excited by your startup as you are. The people you feel you could become friends with. The people who can show you examples of what they can help you to achieve.

About the Author | Leanne Ross

Leanne is a Digital Communicator, Accredited Member of the Chartered Institute of Public Relations, Member of the Chartered Institute of Marketing and Commended in the CIPR 2015 Outstanding Young Communicator Award in Ireland. With a decade in the PR industry, Leanne has led communications strategies across the private, public and voluntary sectors, most recently working with eCommerce e-tailers, startups and social enterprises to harness the power of Digital PR, Content Marketing and Social Media to grow their businesses. She writes a blog called a Cup of Lee commenting on the Irish Communications industry as well as guest lecturing at the University of Ulster and is a regular guest speaker, industry trainer and mentor to young entrepreneurs. In 2016 Leanne released her Top 5 Bestselling book “Talk is Cheap – The Digital PR Your Startup Needs But Can’t Afford” available on Kindle and paperback from Amazon.

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