July 10, 2014
We all know those startup success stories of entrepreneurs who get their dream companies up and running in no time, but today’s harsh economy can considerably impact any budding startup. The truth is, barely seven out of ten startups survive the first two years and only a half make it through five years of age. Startups that embrace specific characteristics do, however, stand a chance at succeeding in their sector. Read on to find out what makes startups successful.
1. Insight & Vision
It’s the entrepreneur’s vision that holds all of the startup team together and sets the tone for its development. A true leader will be able to use his or hers insight to situate the service, skill or product offered by the startup in the market. As you might guess, those who already boast some experience in the field have a much higher chance at succeeding – a study conducted at Harvard Business School concluded that while first time entrepreneurs have only 18% chance of making their venture a victory, experienced managers have as much as 30%.
2. Good Leadership
CEOs of young startups should be able to inspire and motivate their team members to go on despite the challenge and difficulties of the market. With cut paychecks, no health insurance or crazy working hours, the team needs to be reassured that all their efforts mean somethings – the leader is someone whom they will trust to follow.
Startup founders who know many influential and powerful figures in the business will have a higher chance of finding lucrative partnerships or the so-called angel investors. Great entrepreneurs are able to infiltrate any organization and make valuable contacts, all the while having the future of their venture in mind.
Every great entrepreneur knows the value of time – startups that succeed are usually able to get things done at a faster pace than their competitors. Using their time productively and never delaying their activities, startups might stand a chance at succeeding. Even if the team makes mistakes, they can be quickly corrected and switched with with different solutions.
5. Time Management
Getting things done depends on the team productivity and their ability to use scarce resources to achieve as much as possible. Every budding startup takes a toll on the life of its CEO, who has to juggle his time between dozens of responsibilities. The ability to correctly prioritize your activities and focus on things that really matter are both crucial skills that lead startups to success.
6. Determination & Focus
Self-discipline of the CEO sets the tone for the whole team and results in a positive work ethic, enabling workers to get things done quickly and efficiently. The road to success can be bumpy and it’s the job of the leader to radiate determination onto his or her team to motivate it in standing up to all the challenges and problems. Some difficulties can be foreseen, others come as a nasty surprise – with enough persistence and determination, a startup team can deal with all of them.
7. Budget Planning
At their beginnings, startups must learn how to operate on limited resources and avoid any unnecessary expenses. For every area of their activity they should plan a separate budget with specific milestones and short-term goals to delineate the company’s short-term and long-term needs. Doing more with less is again a crucial skill to make a startup work and succeed.
A successful startup is one that can easily adapt to changes – be it new technologies or methodologies that spread over the market and transform it. Startups are likely to iterate their products or services over the years to finally arrive at a perfect solution that delivers in the current technological and economic paradigm.
9. Fundraising Capacity
Lack of capital can ruin a business. Cash flow is essential to keep the startup business operations going and raising capital is one of the main responsibilities of its leaders. Startups can benefit from online platforms like RockThePost that allow to raise funds from accredited investors in a relatively short time. This is a great opportunity for establishing a cash flow for startups, which won’t have to waste their time on investor meetings and presentations.
10. Preparation for Risk-Taking
The success of every startup will entail taking risks. CEOs prepared to take those risks are more likely to succeed in their doings. That doesn’t mean that their decisions should be hasty and thoughtless just for the sake of it – in balancing the risks, entrepreneurs will know when to back off and when to proceed.