The 4 building blocks of startup success
Building a successful startup requires a combination of time, business acumen and talent. Many startups are based on good ideas that have a ready market and a fairly good shot at success. Yet, numerous startups fail a few months after launch. It often comes down to seemingly small missteps but that are in fact profound miscalculations.
It takes more than just a great idea to get a startup off the ground. The following are the building blocks of thriving startups.
While many conversations on the prerequisites of successful entrepreneurship emphasize hard work, it’s difficult to discount the role of what some call good luck but that’s in fact perfect timing. Perhaps the most dramatic example is the ride sharing app revolution.
Taxis have been around for decades but the business model has always been bedeviled by numerous flaws. These have ranged from cost and availability to poor service and overregulation. It’s one industry that had all the signs of being ripe for disruptive innovation.
Ride sharing has proved to be a roaring success but the timing of its entry had to be right. The technology that enables it has only been available to the masses relatively recently. Too early a launch would have inevitably led to failure. On the other hand, if Uber waited too long, someone else would likely have come up with the idea and created an insurmountable first mover advantage.
2. Hiring the Right People
The power of the team in startup success cannot be overemphasized. In fact, if this article focused on just that one element entirely, it still wouldn’t do it justice. You need the right people to grow your business. Employees, especially the ones you hire first, will strongly influence the direction that the performance, value and culture of your business takes.
Your hiring philosophy and process should be well-thought-out. Employee scheduling tools like Humanity can help you extract more value from each employee but can only do so much if the hiring process is flawed.
Your first hires should be persons who are trustworthy, knowledgeable, passionate, adaptable, have positive attitude and are sold out on your vision. They must be individuals who you would be comfortable representing your business in your absence.
As a startup founder, it’s hard not to think about how great it would be if your company eventually became the next tech behemoth like Google or Facebook. However, not enough entrepreneurs adequately prepare for such an eventuality (or even just a fraction of such scale).
Elaborate planning does not insulate you from failure. What it does do however is minimize the likelihood of failing due to avoidable and easily surmountable challenges.
To make your startup scalable, think about what your sales benchmarks and milestones are. Work backwards from these targets to determine how much you should spend on sales and marketing to reach your goals. Examine both numbers to see how sustainable your business model will be at every growth phase.
Such planning also provides a reliable compass whenever you have to quickly make a decision on an opportunity for growth that suddenly emerges.
4. Fundraise Only When You Need To
Pitching to venture capitalists and angel investors is all the rage nowadays to the extent that it’s now considered an integral aspect of growing a startup. However, fundraising can be a bit of a poisoned chalice. Perhaps the most valuable thing you can learn about fundraising is that the money is not free and you have a sacred duty to the investors.
When people pour money into your startup, they demonstrate belief and trust in your vision. You shouldn’t raise money continuously even when you enjoy such goodwill. Remember each funding round raises the bar on future rounds.
Unnecessarily frequent fundraising inadvertently reduces the chances of success for every subsequent funding round thus making it harder to raise money when you truly need it. As long as the startup is viable, there’s a whole lot of costs you can either do without or resolve with personal or business-generated resources.
No business, startup or otherwise, is guaranteed success. But by paying attention to these principles, you have a much better fighting chance of making it.