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Think you’re ready to launch a startup? Not until you take these steps

When startup founders understand the challenges ahead and properly prepare for the obstacles they will face, their odds of success dramatically increase.



People love to toss around the term “startup” for any new business, but not every company that opens its doors is a startup. True startups share three key differentiators: the prospect of exponential growth, an innovative product or service, and a scalable business model. These three components combine to form the identity and heart of the emergent business.

Imagine someone setting out to redefine Cajun cuisine in the heart of Dallas. As a native Louisianan, I have enjoyed Cajun food my entire life. People who travel to the region and eat the spicy, soulful food adore it. Some of those visitors decide to open their own Cajun restaurants back home to share those flavors with a new audience. They dream of restaurant awards, franchise opportunities, and rapid growth.

That sort of venture in Dallas might succeed, but it would be a huge mistake to call it a startup. This restaurant would be little more than the replication of an existing idea in a new market. The founders of this restaurant lack the sort of bold, unparalleled strategy that is a vital ingredient of a true startup.

Startups largely exist to disrupt the natural order of things, often reinventing entire industries along the way. If they succeed, their plans will scale and evolve at such a rapid pace that the business looks almost unrecognizable within a matter of years. Few people are aware that Android’s path to smartphone glory started as an operating system for cameras, but the startup was able to strike gold by keeping an open mind and adapting.

Real startups are scalable, revolutionary operations that can exist anywhere. A new Cajun restaurant in New Orleans would not perform identically to the same venture in Montana, but a breakthrough in artificial intelligence technology would be just as impactful in Silicon Valley as it would be in New York. That entrepreneurial effect is unique to startups, and those who run startups play a different game than everyone else.

A world of mismatched expectations

Confusion about what is (and what is not) a true startup creates false impressions of the challenges founders face. This leads to unnecessary growing pains and, in some cases, failure. With half of all companies in the U.S. folding after five years, it is clear that quite a few founders do not know what to expect when they go into business.

Incredible successes like Mark Zuckerberg and Evan Spiegel warp the reality of the startup struggle. Tales of triumph are few and far between when compared to stories of heartbreak, near misses, and gambles that did not pay off. Some people bought bitcoin in 2010 and made millions; others bought in December 2017 and lost most of their money. The same gamble had dramatically different results at different times.

Misconceptions about startup life are not limited to young people, though. Older workers today see the successes of people with less experience and say: “I have 30 years of experience! I could do better!” They, too, fall prey to false promises of glory and overnight success.

Startups that do succeed have a foundation of hard work, great ideas, thorough research, and sensible business decisions. When those ingredients combine with a little luck, new companies flourish. When one component is missing, the odds shift against the founders. Only those who know what to expect can weather the storm and come out on top.

5 steps to take before launch

In many ways, startup life is not for the faint of heart—it presents a steep challenge that evolves on a regular basis. To ensure you are ready to shepherd your startup to success, follow these five tips:

1. Work backward from end goals

Regular people do not beat existing markets. If you want to start something special, you cannot just be familiar with the market—you must become a leading expert in your field. Lay the groundwork, do the research, and stay focused on the task at hand.

Once you have laid a solid foundation, set a goal for the end of your first year and work backward. Say you want to make a million dollars, for example. You would focus on the cost of goods sold, figure out how many goods you need to sell to generate that revenue, and then make plans for how you will hit that sales target. This might sound painfully simple, but a straightforward approach can help you weed out the impossible from the achievable.

Do lots of research to get to know your client more so you can get a leverage on how to sell your product.
Do lots of research to get to know your client more so you can get a leverage on how to sell your product. (Source)

2. Research the consumer

Research your customers to paint a picture of your ideal prospects. Discover their spending habits, demographic data, gender—anything you can get your hands on can be helpful. Before you start, know whether you will sell to New York mothers under 45 or retirees who live in Colorado.

Not sure where to begin? Reach out to your prospective customers. Conduct focus groups to determine whether your product or service resonates with people. Figure out who they are and what they value—including how much they would spend on your product—and leverage that information to create a path toward long-term brand loyalty.

Boeing only has a few customers, for example, but those customers are all over the world and need exactly what Boeing offers. In other words, your prospective customers do not boil down to the sheer number of people; determine who will buy and how you will manage to keep your product top of mind.

3. Stick to the first 1,000 days

Focus on the first three years of business and not what might come next. You need data and experience from your first three years to understand what works, what does not, and where your opportunities lie.

You can forecast—and you will probably have to for the sake of your investors—but it is impossible to predict further out. Remember the crash of the late 2000s? People assumed America’s economy would continue to feed successful businesses, and many companies that relied on this assumption went under. The modern economic climate is business-friendly, but you will be better able to adjust for shifts as they occur if you stick to the short term.

4. Embrace the value of data

In 2018, data is everything. I deal with hundreds of millions of data points in my insurance business, but those points alone do not make a strategy. Collect as much data as you can, and then narrow your focus to the points that matter to your operation. Listen to what the information says rather than what you would like for it to say.

McKinsey & Company estimates that big data in American healthcare could lead to a 17 percent dip in U.S. healthcare costs—to the tune of about $450 billion. Nearly every market is evolving thanks to improved data capabilities. Use data to identify opportunities, customer bases, and market inefficiencies. Then, use that insight to inform your strategy.

5. Roll up your sleeves (and get to work)

This is the real secret of the startup world: There is no substitute for hard work. More importantly, hard work in a smart direction delivers incredible results.

Ever seen that commercial in which the sick father tells his child that he needs to take a day off? Dad cannot call in sick, of course, as he has to take care of his son. Similarly, startup founders cannot afford to take days off. The business world never stops moving, and you need to find ways to maintain a similar pace. Take care of yourself, but never let up on your desire to innovate and succeed.

So what really makes a startup? The founders do. When people understand the challenges ahead and properly prepare for the obstacles they will face, their odds of success dramatically increase. If you are the founder of a startup (or a potential founder), take these tips to heart to give your new venture its best chance to succeed.

(Featured image by Sunny Studio via Shutterstock)

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

David Disiere is the founder and CEO of QEO Insurance Group, an agency that provides commercial transportation insurance to clients throughout the U.S. He is a highly successful entrepreneur who has launched business endeavors in the real estate, oil and gas, agriculture, and automotive sectors. He is an avid collector of classic cars, rare art, first-edition books, and Lalique hood ornaments. David is equally passionate about philanthropy, and he works to help underprivileged children through the David & Teresa Disiere Foundation.