We've all heard startup success stories like Amazon, Uber and Airbnb. These represent exceptions, however -- not the norm.
So why do more than half of startups fail?
Well. It can be due to their leaders. CBInsights found that it's often is not having the right team. Another recent study cites "incompetence" and "unbalanced experience or lack of managerial experience" as main derailers. So how can you increase your odds for success as an entrepreneur?
In our book, Winning the Long Game: How Strategic Leaders Shape the Future, we distill years of experience developing strategic leaders to try to answer that question. Here are six skills we've identified that help entrepreneurs to become more strategic-minded and to increase the long-term viability of their venture.
1. Anticipate: Be vigilant routinely, not just initially
Successful entrepreneurs identify unmet needs and quickly move to address them. Jack Dorsey created real-time microblogging when he developed Twitter and saw potential in accepting credit card payments via smartphone with Square.
But it's easy for entrepreneurs to develop tunnel vision.
Reed Hastings was so dedicated to differentiating his company's services that he didn't anticipate how customers would react to the company splitting into two businesses with separate subscriptions for receiving DVDs via mail (the traditional Netflix) and streaming video (the new Qwikster). The 60-percent price increase for dual-subscribers resulted in the loss of 800,000 customers and a plummeting stock price.
Entrepreneurs can become so committed to bringing one idea to life that they may miss opportunities to anticipate shifts in customer behavior, the entry of new competitors or internal issues.
2. Challenge: Check your assumptions
Successful entrepreneurs challenge the status quo. Sir Richard Branson has challenged one industry after another by not going into ventures to make a fortune, saying, "I do it because I'm not satisfied with the way others are doing business.”
For many entrepreneurs, this passion plays a key role in their success, but strong emotions can lead to misplaced focus, refusal to adapt or overconfidence.
Better Place CEO Shai Agassi believed so strongly in his vision of running a country without oil that he shifted the direction of the company from building an infrastructure for charging electric cars to being the provider of electric cars for an entire country. This passion led him to overpromise, embellish information and be inflexible in negotiations -- leading to bankruptcy after five years of hype and $850 million in funding.
Entrepreneurs need to balance passion for their vision with a willingness to challenge their assumptions.
3. Interpret: Don't just collect data, analyze it
All companies collect data, but few leverage it strategically. Entrepreneurs should go beyond what data says at face value to understand needs, patterns or implications. As Henry Ford once said, "If I had asked people what they wanted, they would have said faster horses."
A notable example is Facebook, which constantly tests changes to its platform. Often Facebook hears users complain about changes but instead of reacting, the company observes how its users change their behavior within the platform and initiates improvements that way.
4. Decide: Own your decisions
Zappos was facing bankruptcy before making the bold decision to bet the company on a last-ditch idea to allow free returns. No one had done this before, and the shoe company didn’t know if the model would work -- but it had the courage to try.
Ultimately, the model transformed Zappos into a hot brand that redefined the industry and customer experience. The lesson for entrepreneurs is to explore all options and fully own the one you choose.
5. Align: Build the right team
The best leaders recognize that success does not come from a brilliant idea or single visionary alone. Few entrepreneurs have all the necessary capabilities in-house, so they build a network of partners who believe in the same vision while offering complementary capabilities. A diverse team can help provide the multiple perspectives needed to think through challenges in fresh ways.
As Branson said, “A team that challenges each other will be successful together.”
6. Learn: Embrace failure
Lesson one in Venture Capital 101 is nothing ventured, nothing gained. Failure and resilience must be a part of the entrepreneurial DNA.
Sara Blakely, founder of Spanx, said her father often asked her, “What have you failed at this week?” His message was to keep trying. She struggled for years, going from one thing to the next before hitting it big with Spanx. Successful entrepreneurs frame failure as an opportunity to learn, rebuild and try again.
The key point? Entrepreneurial leaders who want to win the long game can employ the set of skills described here to plan, sustain and reinvent their path to success.
Paul J.H. Schoemaker, Decision Strategies International founder and executive chairman, and Franklin Shen, Decision Strategies International senior consultant, also contributed to this article.