Elon Musk, Richard Branson & Jeff Bezos' Best Advice for Ensuring Your Startup Doesn't Fail Stop fearing your business will fail.
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Imagine some sickness with a 90% mortality rate: Doctors would be scrambling for a cure and we certainly wouldn't be lining up to catch said disease. Yet, even with a 10% chance of success, more people are starting their own businesses than ever before. In 2021, 5.4 million applicants filed to begin their own businesses, up 53% from 2019. The sad truth is that a majority won't survive.
Paradoxically, a new survey of 2,000 aspiring business owners, commissioned by Huntington Bank, found that 73% of those polled were "more passionate than ever" about launching companies in the near future.
Ignoring all the naysayers, in 2007 I decided to go off and create a business of my own. I had a lot of weird ideas that had no basis for my arguments such as "partners and shareholders are bad" and "I can do this on my own and not be responsible for others".
Three failed companies and two great successes later, my impulsive "let's see what happens" attitude honed into a focused fervor. It took five years of being unable to pay rent, destitution and dealing with a disappointed family to learn my lessons. Even now, I still regret not listening to suggestions from others I met along the way.
I see many others unnecessarily following this same path of trial and error that is so often riddled with failure.
Fortunately, there's a science behind this lack of success. Look deeper into anything that's worked and see that winning results aren't random, but rather the result of an organized approach. Define your vision, set your targets and be persistent in your goals. This is the cure that startups need to administer.
Define your vision
With any startup, the process of identifying a problem and coming up with solutions establishes the company's role in fulfilling a societal need. This vision becomes a bedrock upon which all future decisions are built. If anything is out of alignment with this, throw it out.
With this strategy, Elon Musk was able to build a billion-dollar empire within the financial services, automotive, energy and aerospace industries.
"Boil things down to their fundamental truths and reason up from there," says Musk. "Understand the trunk and big branches before you get into the leaves...or there is nothing for them to hang on to."
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Sequence your process
Establish a target-based program of goals – hire this type of person, set up client dashboard design, test the sales pitch – and write these tasks down in the sequence needed to accomplish them. Define your exact processes and be clear about the necessary steps to avoid deviation.
Putting our goals in writing keeps them on the top of our mind, identifies areas for focus and lets us break them down into clear benchmarks of achievement. Billionaire Richard Branson swears by note-taking and cultivates this "notebook culture" at Virgin.
"An idea not written down is an idea lost," says Branson. "When inspiration calls, you've got to capture it."
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Focus on the goal
Without a well-written strategy outlining objectives, scope and competitive advantage, it can be easier for a new startup to lose momentum. Distractions can end up driving a business owner to give up on their vision or become passive about accomplishing tasks.
Through Amazon, Jeff Bezos created more shareholder value than any current CEO because of a clearly articulated corporate purpose and philosophy guiding the decision-making of every single one of his thousands of employees.
"It helps to base your strategy on things that won't change," says Bezos. "Who your competitors are, what kind of technologies are available...those things are going to change so rapidly that you're going to have to change your strategy very rapidly, too."
Don't rush to scale
Today, Airbnb hosts over 150 million guests in more than 65,000 cities, but only because its founders understood that to scale, they needed to do things that don't scale.
"You don't start with 100 million users," says the company's founder, Brian Chesky. "You start with a few, so stop thinking big and start thinking small."
For two years, we refused to start building technology for scale around our company because we knew the process had to first be refined. Launching an expensive campaign without first building the foundation and testing it adds more risk for a new startup with an already low survival rate than persisting in the outlined goals towards achieving a vision.
Work with every customer. Check the entire process to see that quality output is occurring. Do every single micro-step to accomplish your goals before considering any distractions.
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