What makes a startup successful?
At a recent event, I was asked to provide five key factors that help determine whether a start-up succeeds. Here’s my list – see whether you agree.
- Ensure You Have A High Quality Business Idea
It should go without saying that a start-up needs to have a high quality business idea. If your business is largely based upon a competitor’s offering, how will you manage to entice customers away and to start using your product or service?
Perhaps you have a better location, a cheaper or more effective solution, or perhaps you provide better customer service. Whatever it is, you must be clear what sets you apart.
However, the most stand-out companies have a quality that’s hard to copy. This may be some form of intellectual property or an incredible company culture. Whatever it is, it acts as a barrier to new entrants taking your custom.
- Prioritise Credibility
Start-ups have many advantages over their more well-established competitors. For instance, they tend to be more flexible, able to make decisions quicker and provide a cheaper solution. However, start-ups also face significant hurdles compared to their larger rivals.
In particular, they often lack credibility. There are a number of ways in which a start-up can overcome this issue. For instance, they can obtain customer testimonials, increase brand familiarity or hire a well-respected industry expert as a non-executive director or board advisor.
For some, a start-up is perceived as a riskier option. Credibility building is all about demonstrating that you can be trusted and reducing the customer’s perceived degree of risk of doing business with you.
- Have The Resources To Support Growth
When people think of “resources” they often assume this means “cash”. Whilst cash is an essential resource, it’s not the only one needed to make a start-up successful.
Successful start-ups typically recognise early on that they need functional experts (for areas such as technology, finance, marketing, etc.) rather than generalists if they want to grow and develop.
In order to know what resources it needs to have and manage most closely, a start-up must be clear what its success factors are….
- Know (and Monitor) Success Factors
Whether a start-up succeeds or fails is quite often based on a handful of critical success factors. If the company is able to address each of these issues well, the company will prosper; if it doesn’t, the company will most likely fail. It’s imperative that a start-up knows its own critical success factors.
However, listing the success factors is not enough. The important step is for the company to monitor these success factors on a regular basis and ensure the business is heading in the right direction.
- Listening Leadership
Managing a start-up is not easy. There are a range of issues that must be dealt with and a limited number of people to deal with them.
Managers of successful start-ups are able to get the right balance between listening to (and acting upon) the advice offered by professionals as well as investors and fellow directors, whilst ensuring that the business acts quickly and gets stuff done.