A startup’s growth depends on a lot of factors. Being an individual endeavor in the beginning, it relies on a lot of emotional and physical investment. But there are some winning traits that set a successful startup apart. In this blog, we explore them and show how you could trigger growth in your startup.
Why Do Startups Fail?
In general, there are seven key reasons for startup business failure. They can usually be credited to have a hand behind various business failures experienced by most entrepreneurs who try their luck in business ventures.
- Inadequate focus.
- Inadequate commitment, passion, and motivation.
- Excessive pride, which results in an unwillingness to see or listen clearly.
- Receiving advice and suggestions from the wrong sort of people.
- Unsatisfactory levels of decent mentorship.
- Inadequate business knowledge, both general and domain-specific – operations, marketing, etc.
- Collecting too much of sum too early.
It can be noted that these factors are mostly concerned with the decision-making capabilities of the entrepreneurs and the basic business knowledge and experience they possess.
More than 70% of startup founders eventually realize that their intellectual property is not a competitive advantage.
However, another set of reasons cropped up when it came to external factors that impact a business. Most of these reasons listed for the failure of business are a consequence of flaws (and eventual failure) in leadership. Some of the most significant factors that result in this are:
- No need in the market
- Wrong team
- Exhausted cash
- Getting outcompeted
- Issues related to cost and pricing
- Poor quality of product
- Incapable business model
- Poor/Insufficient marketing
- Ignoring customers
The two sets of reasons are both similar yet different from one another. One can easily notice that all of these factors or reasons are issues related to business and team. Even the reasons relating to the product itself aren’t exceptions to this.
There are always issues like these, and they happen to be tied ultimately to the leadership and the leader’s capability to make a strong and able team, and run a business model and business discipline and thought process. It is seen that, even if the failure of a startup is caused by the exhaustion of money, it is always the result of other factors or actions.
Why Do Startups Succeed?
As the reasons behind failure have been discussed, let’s throw some light on the sources of information on why businesses tend to succeed. An article from Harvard Business School, named “Performance Persistence in Entrepreneurship,” answers a lot of concerns and questions with detailed research. It suggests that previously successful serial entrepreneurs are much more likely to be successful and that the best VCs are incredibly choosy when it comes to picking serial entrepreneurs. Even though it provides extensive research, it doesn’t answer the chief questions about the qualities of a successful entrepreneur.
What are the 5 Cs of Startup Success?
Having a seemingly great idea for a business and then running with it can be very fun and thrilling. However, a few steps should be taken before you can start to sprint. Some very essential things have to be in place. You may think of them as defined prerequisites. There are five things that every startup requires to succeed irrespective of the nature of a startup. They all coincidentally begin with the letter “C,” hence the “5 C’s” of startup success.
Your idea might be unique, groundbreaking, and world-changing. You may even save the world from impending disaster and inevitable doom. But if you don’t possess adequate financial backing, the startup won’t get anywhere. Your wings are clipped even before you spread them. It is the brutal reality of business. Calculate your numbers, keep track, and have a complete know-how of sums coming in and going out.
Having sufficient Capital with you will help you solve many issues that might have otherwise seem unsolvable to you. As they say, money does make the world go around. Never underestimate the importance of having enough investors to back you up in the time of your need.
Capital is the backbone of every growing enterprise.There are many issues you will face as a new startup company. In each stage of the journey, the need for the capital will be pointed out. Management of rent for the office space, taking care of living situations of your employees, wages for the work provided by the employees. All of it needs that one thing you can’t do without, Money.
However, not everyone is lucky to have VC funding. If you do not happen to be one of the very few with VC funding, you need to buckle up because it will be a tough ride. Sell. Be ready to sell your product to anyone who shows any sort of interest in investing in your business. Get some money as initial investment, set goals to achieve, meet them, and get more money in return. It is tough and not at all fun to raise capital, but without it, your startup ends before it starts.
The core idea behind the startup might have emerged in your head. It might be you who started the company. It might be you and just you who probably did everything that was needed in the beginning.
However, at some point, you will feel the need to bring colleagues on board who can serve as the helping hand in areas you lack expertise in and can tell you if a particular idea is worthy enough to spend time and resources on. To ensure that your work is impeccable, it might be useful if you work with some colleagues who specialize in certain areas such as technology, finance, market analysis, etc. Though these professionals might be needed at a certain point by your company, the need for it can be judged by you according to the situations faced by you.
Assuming you already have customers, how to avoid being smug and gain new ones? Identify what your customers want by sending out surveys. Promotions and fresh contents please and appeal to customers.
The thing that attracts the customers most is the ability of your workforce to show creativity while designing and delivering a product. People don’t want a monotonous type of product displayed by multiple companies. The employees should display creativity in designing, advertising, and presenting the product as that will attract more attention from possible customers. An ingenious and unique presentation of a product will help you stand out amid other products and companies of similar type.
While understanding the competition in the market, Their importance, along with the pros and cons, are not to be overlooked. It is the competition that makes sure that you stay on your toes, gives rise to new ideas about better running, management and advertisement of your business. Without competition, you may go careless and lose dedication and touch. Try playing their customers at times to gain better ideas.
To promote better competition, it might be helpful to keep an eye on the quality of the workforce and the infrastructure you use in your company. Better infrastructure motivates people to work harder to maintain the status quo. Regular incentives should be provided in reward for good work to keep the workforce morale high at all times.
Having an engaged community is essential. Reach out to the people first. Do not sit back, waiting for them to engage with you. Find a place or a meeting point where people can socialize, virtually, or in person. Getting personal helps you gain better insight into your customers’ needs.
Making your own network of customers and professional acquaintances is an important part of managing your business. If the impression you give off in your network is pleasing to others, it might help help you out when you get into tough spots in the future of your business. It is often seen that maintaining a good network and image can act as social capital. You will be able to utilize this to have things go your way or exert pressure upon your competitors.
Building a successful startup is a tough game. A single wrong step has the power to send you down the ladder. And, even if you are on the top of your game, maintaining the status quo is equally hard. Therefore, it does not come off as a surprise that only a bare minimum of new startups survive in the competitive market.
By keeping our 5 C’s of success in your mind, you can detect if you and your startup are on the right path. Take a good look at the winning traits and do check out the rest of our blog.