There is no absolute guarantee or formula for success in a startup. There is a guarantee for increased probability when the leadership takes lessons learned from those who have been successful, and sometimes not so successful, before.
It is not uncommon to come across articles articulating why start-ups fail. With a quoted failure rate of over 50% in the first four years, it is no surprise there is so much information being offered on the topic. This top list of causes includes incompetence, lack of managerial experience, neglect/fraud, and simple lack of experience with the industry, goods, or service.
So what about the flip side? What are the insider secrets to launching and building a startup that either stays in business well beyond the first four years or is sold for a premium within the first four years?
Here are some key tips to leading your startup to success:
One of the biggest challenges for startups is not having any history. There’s little or no financial history, customer data, marketing information, or experience. With no prior “but that’s how we’ve always done it”, startup leaders have the opportunity to question everything while figuring out the right formula. As much as you are looking for answers, the best place to start is with the right questions. Should you be asking your customer base what they want to see next or asking them how they are using your product? You started the company because you had something unique to provide the marketplace; either the product, the delivery of it or something in-between. Has the value of that ‘uniqueness’ changed or is simply the messaging that isn’t ringing true? Never stop asking.
Clarity & focus
Start with clarity on what problem you are solving in the marketplace. That will then drive your focus. One of the biggest pitfalls I have seen startup leadership struggle with is what I call the “Shiny Object Syndrome”. It is very easy to get caught up in the spiral of trying to solve too many problems or being too many things to the marketplace. Unless there’s a pot of gold sitting in front of the shiny object, beware, since more times than not, it takes you off focus and dilutes your efforts. Successful leaders are very clear on what they do, who they are, and the marketplace they serve.
Entrepreneur does not equal Superman
Starting a company is a lot of work and long hours. Unfortunately, working those hours has somehow become a badge of honor for entrepreneurs. There’s a lot to be done and you want it to have it all done by yesterday. Successful startup leaders know how to pace their efforts. They know how to distinguish between the revenue driving activities vs. the supporting activities. Their efforts are focused on the activities that will impact revenue first and everything else comes last. A badge of honor is a successful company or exit, not a number of all-nighters put into getting it there.
Know your strengths and your weaknesses
Being a jack of all trades can be helpful at the beginning but I have seen it quickly work against startup leaders. Learning is an intrinsic part of a startup but there is a limit. Rather than trying to learn everything on your own, stop and ask someone who has done it before. This rarely needs to cost you a thing. Most long-term experts and executives I know are always happy to provide their advice and lessons learned. Any opportunity to avoid learning it yourself is a win. Don’t hesitate to reach out to your network with the question, “Has anyone ever…?” or “Does anyone know about…?” Stick as true to your strengths as you can and beg, borrow, or steal the rest.
There is no absolute guarantee or formula for success in a startup. There is a guarantee for increased probability when the leadership takes lessons learned from those who have been successful, and sometimes not so successful, before. It has been reported that founders of a previously successful business have 30 percent chance of success with their next venture, founders who have failed at a prior business have a 20 percent chance of succeeding versus an 18 percent chance of success for first-time entrepreneurs. Borrow their success and learnings to find your unique path to success.
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 in 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.