You Must Blend These 5 Ingredients Perfectly for Startup Success
Entrepreneur's New Year’s Guide
Stepping into an entrepreneurial position is stressful in a number of ways, but most of the little stresses route back to the biggest one—the worry of whether or not your startup will succeed. The threat of failure is what drives entrepreneurs to work hard, and it’s also what drives so many to give up or burn out. There’s no single factor that can guarantee a startup will eventually succeed, and there are plenty of strange cases out there of theoretically great startups that don’t quite make it and peculiar ideas that somehow become breakout successes.
So what exactly is responsible for making startups succeed? There are five major factors, and in combination, they can help any entrepreneur find success:
1. The idea.
The value of an idea might seem like the only important factor for determining a startup’s success, but in reality it’s only one of several. Still, the strength of an idea is often enough to determine whether or not people will be willing to pay money for it. Though hard to judge in any precise terms, an idea’s strength can often be measured in terms of its uniqueness and its practicality. Its practicality determines how much people will want or need your products and services, while its uniqueness determines how much competition it’s going to face and possibly how excited people are for it. You can use market research to judge the practicality of your idea and competitive research to determine its uniqueness, but know that there are often less tangible factors responsible for making a startup idea “good.”
Related: Your Ideas Have No Value
2. The team.
The talent and skills of your startup team are critical for ensuring the proper and timely development of your business. Your partners will help you in making decisions and forming partnerships. Your financial team will ensure your cash flow stays positive and your budget stays under control. Your marketers will increase your sales and raise awareness of your brand, and your product experts will be making sure your idea is executed properly.
Don’t leave yourself out of this equation, either. Your skills, experience and talents will also play a role in how your startup eventually develops. Work hard to maximize the value you bring to the table, and take exceptional care in the hiring process to make sure only the best are allowed within your organization. Culture is an important factor here, too. Make sure your teammates can get along.
3. The work.
The work itself is a measure of how well the idea is planned and executed. Even the best idea in theory needs a formalized business model and successful implementation to be successful. Sometimes, good ideas fail to be executed properly for one reason or another, and the business collapses despite its potential. Other times, merely decent ideas explode in popularity due to the exceptional work and care that went in to the business plan and general operations. Passion and diligence are your greatest tools here, but know that they have to be present in all levels of your organization.
4. The support.
Support here refers to both financial and practical support. Millions of dollars of upfront funding can make it far easier to set your business up for success, but funding alone can’t necessarily make a business succeed. Funding, lines of credit, loans and personal injections of capital all help keep a business above water during those first few critical years, but support extends beyond the financial realm. You’ll also need mentors and advisors to help you guide the course of your business, as well as partners, vendors and first-round clients who believe in you and support you.
5. The timing.
The timing is more important than you might realize. Even perfect, well-executed ideas can fail if released to the market too soon or too late. According to a TED Talk by Bill Gross, timing may very well be the most important factor for startup success. If you rush to the market before consumers are ready for your product, they won’t buy it. If you wait too long and launch after a close competitor, you may lose the advantage of early brand recognition. Of all the factors listed here, this is the most subjective, and the most difficult to harness successfully.
Understanding these factors and executing them are two different things. Knowing you need a great idea to succeed is important, but coming up with one is hard and judging the value of an idea is even harder. Making a startup isn’t straightforward or easy, but knowing the areas responsible for making previous startups a success can point you in the right direction. Work with a mentor if you have trouble measuring these factors in your own startup, and don’t underestimate the value of your instincts.