5 Characteristics of Successful Startups
Successful startups are few and far between. Approximately only one in ten go on to enjoy success, while the rest are laid by the wayside. While there is no shortcut to success, there are certain key characteristics that successful startups share. Learning from and adapting these characteristics will help ensure the success of your own startup venture.
Ample financial capital
One of the most common reasons startups fail is that they run out of money. The very nature of the startup business means that you are almost guaranteed to run into a variety of unexpected expenses. This could be anything from unforeseen fees to payment delays or even a stock market crash.
At other times, it’s not about costs but opportunities that require a decent amount of financial capital. Opportunities to take your business to the next level have a habit of presenting themselves when you least expect it, and having enough capital will allow you to utilize these precious opportunities when they present themselves.
Manage your cash flow wisely, and always have significantly more capital than you think you will need. Start-up success often follows a path that is non linear, requiring adaptations and adjustments along the way. Bolster yourself with a comfortable buffer of capital and you will be safeguarded from unexpected costs, while simultaneously be better equipped to seize opportunities as they pop up.
As an entrepreneur, you will face a lot of rejection, especially in the nascent stages of your startup venture. Don’t be disheartened though, this is the rule rather the exception. The very nature of entrepreneurship means that you are something of a contrarian. You have a big idea, a unique idea, one that at first may seem unfeasible to some, laughable to others. Ride -sharing, staying at a stranger’s home instead of a hotel, a search engine when there were no such thing as search engines.
These were bold ideas that at the time, and probably seemed that way to everyone except those involved. Understandably then, many investors will turn you down. If everyone jumped at the idea immediately, someone else would have already done it a long time ago.
The key here is to embrace rejection. Understand that you will receive a heap of it, but learn from it. With every rejection comes a lesson. Listen to why people are rejecting your pitch. What can you work on? You might be on to something truly great, and rejections are your stepping stones to success.
We’ve all heard the mantra, “fail fast, fail often” or some variation thereof. This popular mantra has received some criticism for its seeming endorsement of embracing failure at the cost of success, all in the name of learning some lessons. But at its core, what this mantra truly advocates is resilience – bouncing back from setbacks, over and over again. The key to bouncing back from setbacks is to learn from mistakes, adapt and come back with a new approach.
Successful startups share the characteristic of learning quickly, adapting and move forward. Swiftly evolving and adapting to challenges will ensure success in the long run. Time is money. Getting stuck at setbacks, not adapting and not bouncing back from them quickly, is going to cost a fortune. It is important to make informed decisions but don’t get stuck in the trap of paralysis by analysis. Make a decision, take action and always keep moving forward, learning along the way.
One of the most important decisions a startup will make is who it hires. Your employees become your company. The wrong type of people can ruin a startup. Conversely, the right type can help it thrive. Successful startups often focus on hiring people who not only have the necessary qualifications, but share similar core values. Figure out what core values are the most essential to your startup’s future success. What most embodies your brand? Is it persistence? Lateral thinking? Innovation? Cognitive diversity? Or some combination of the above?
Successful startups also have the confidence and trust to hire people who are stronger than or different to them. Hires who are cognitively and personally diverse complement each other’s strengths. Hires who are stronger or more talented in certain areas serve the purpose of lifting everybody up.
In a nutshell, ensure that the hiring process is carefully crafted to acquire high quality individuals.
Get it right before scaling up
In a recent poll, 42% of startups cited “lack of a market need for their product” as the number one reason they failed. It may sound obvious, but making sure to get a product right before scaling up is a hallmark of most successful startups.
Successful startups, especially in the early stages, devote a substantial amount of time interacting with their customers to find out what they truly desire in a product or service. They painstakingly handcraft the user experience, tailoring features, making tweaks and adjustments as they go along. It is tempting to want to scale up at this point, but patience must be exercised.
Once the product is perfected, or at least polished enough and crafted to a high degree of excellence, it is time to start scaling up. At this point you will ideally have a product or service so good that your users want to use it and won’t have to be coaxed into using it.
An excellent product also ensures users enjoy the experience and then tell their friends and family about it. Basically, once you get the product right you won’t have to expend as much resources in trying to generate demand, and scaling up will be a lot easier.
Written by Garry Johal