Since the dawn of time, man has always wanted to augment his lifestyle. Whether it’s graduating from stone tools to fire or from agriculture to industry, growth has invariably been the primary focus of every human. The same can be said for today’s startups.
Thus, it is only fair that the most advanced species on this planet, at the most technologically advanced period in history, take this culture forward. The one issue that plagues the modern man is dissatisfaction.
There is an ever-present dissonance with what one expects and what he/she receives. It is no surprise, then, that startups are on a meteoric rise. There is a reason, after all, why Silicon Valley is idolized by millions, and why so many countries spend millions trying to develop their own iteration of the tech hub.
However, when you take off the rose-tinted glasses, a dire reality stares back at your face. Most startups fail to make past the one year mark. A majority of the remaining startups struggle for years to break even and eventually succumb to the market pressure. The few that do make it often lose their sense of innovation and start acquiring smaller companies to increase their portfolio. Only a handful of startups manage to stay relevant while keeping investors hooked on their business plan and customers interested in their products.
So, what secret sauce do these companies use to check all the boxes and succeed? The truth is it’s not about the sauce. It’s about the ingredients. Just as in programming, the right code isn’t the one that gives you the desired output for a set of inputs but one that can tackle any kind of input efficiently; startups aren’t about ticking a couple boxes and improvising the rest, they are about planning ahead of time and to be prepared at all times.
There are a few steps one can take to ensure the success of their startup:
Know your worth
A startup needs funds to operate and investors (or Venture Capitalists) are the ones who provide the funds. But, in order to do that, the investors need to know what the startup is worth. Interestingly, the investors are also the ones who determine the value of a particular business in the market.
Gauging your startup’s worth can be a tricky task especially when you’re just starting out, but it’s an important task nonetheless. Few are as fortunate as Twitter to have investors lined up without any real growth. Remember, even the micro-blogging site is struggling now. Sooner or later, the “growth bug” catches up to your startup.
Your value will not be defined by the data or facts as none exist in your case. However, you can let the investors know what you think you’re worth. As tempting as it sounds, glossing over important numbers to inflate the supposed value of your business can be fatal for the future of your startup.
Do your research, read up on similar companies’ value, factor in your location, and other such parameters. Having a financial projection for your product(s) will help sway the investors in your favor. However, it is not a replacement for actual data. Show them that there is a huge demand for your product and the capital will come knocking. You can also bring in someone with financial expertise into your startup to help ease the effort.
Save your IP
Having a good product isn’t enough. Due to the nature of the competition in this fast-paced world, the winner takes it all. That is exactly why saving your work from legal entanglements should be a priority. Always file for patents as soon as possible. As soon as your product has a workable prototype, file the copyright claim. The US patent system favors the first person (or company) to file the patent rather than the first person to conceive the product.
Filing the copyright doesn’t only thwart competitors from infringing on your ideas, it also instills confidence in your investors. Patent approval is a long and arduous process and can take up to two years to complete. Thus, filing the application is only half the battle won. You need to continue developing the product while your application is being processed. Also, keep the product (or design) in question out of the spotlight.
Intellectual Property (IP) is an important asset that you’re going to want on your side. But, it is not the be-all and end-all. IP is barely the means to achieve your actual target. Bill Gates is reported to have once said: “Intellectual property has the shelf life of a banana.” And it stands true. You must keep developing the product and again file for copyright as it evolves.
Keep your eyes on the prize
It is very easy to deviate from the defining goal of the company. A tempting new technology may come along that sways you away from your ambition. Do not let that happen. Your target should represent the ethos that your startup is running on. The ambition of your goal should be set in stone. Every employee in the startup should be reminded of the goal and their contribution to it.
An agile strategy for achieving the goal is vital to the growth of your company. Lay out a detailed approach to attain your startup’s objective. Set short-term goals, which, in turn, help in accomplishing the long-term ones.
A daily achievable target must be set for every employee with a reasonable increase in productivity expected every month. A team meeting should be set up every few days to establish what has been achieved and what remains. The areas in which things are going wrong must also be brought to the fore.
Roles should be clearly defined in the startup so that there is no visible overlap in the working of the company. The problems faced by the teams/employees must be immediately dealt with. There must also be a mechanism to remedy problems being faced by the employees to ensure the protocol is maintained.
The world of startups can be as treacherous as it can be rewarding. A product you think is relevant today may not be as relevant tomorrow. The problem with hindsight is that you never get it on time. When one has worked on something for months or even years, only to find out that the market has rejected it, it can be heartbreaking. This is why a new methodology is on the rise: the lean startup.
The idea behind the lean startup is quite clear. You don’t have to wait for years before the product is ripe for the market. A lean startup indulges its clients into the development process and shows them the progress being made in real-time instead of relying on intuition. In place of attempting to reinvent the wheel over and over, it is sometimes better to ask the customers about the project.
This will not only save time and resources for the enterprise, but it will also ensure that your work isn’t all for waste. Another positive point of this methodology is that the consumer feels involved in the whole process and will have little to complain about when the final product is shipped. The process also relies on the health of the team and offers various ways in which its productivity can be improved upon.
The spotlight feature of the methodology is the agility it provides to startups. With lean ideology, the company becomes a collective organism that grows, learns, and adapts to every change.
Understand your market
Where does your startup belong? What problem is it solving? Are consumers going to be interested in your product? Are your competitors lacking somehow? You need to be able to answer these questions without any hesitation. The phrase, “know your market better than your product” stands true here. If you make a great product and no one really cares about it, then you didn’t make a great product.
Learn about your consumers, their spending habits, how can your product impact their lives, and how they can use your product to solve a problem. You can use social media tools to connect with your prospective buyers to know more about them. Get their opinions on how you can improve your enterprise’s services and what else they expect from the startup.
Knowing what your customers want is not enough, however. It is important to know your rivals in the field. How your competitors are innovating and where they are lacking are necessary details for your market research. What kind of customers do they have and are their customers satisfied with their service/ products? If not, how can you improve upon it with your product(s)? These are all important questions that can make or break your startup.
Be prepared to pivot but try to avoid it
This may sound like a reversal of the third point, but it’s not. There comes a time in a startup’s life where its business plan starts to stagnate and no more room for growth is available. It is then that the startup may decide to pivot, not necessarily out of desperation, but to find an alternative route to grow.
A pivot, however, requires all the other steps to be undertaken again with a different strategy. As taxing as it may seem, it’s only the beginning of a long journey that’s about to be retreaded. A pivot should be avoided at all costs unless there is no other way out. While hitting the reset button may sound alluring to some, it almost never works.
Pivoting can cause investors to lose interest in your project and even weaken your team’s morale. However, there have been cases where pivoting has worked wonders. Most notably, Pinterest and Twitter came into existence because of heavy pivots from failed ventures. So, avoid it at all costs but if there’s no other option in sight, go for it with extreme caution.
Surround yourself with capable people
You could do everything else right but if the people in your team are not competent, it’ll all be for nothing. Almost 23% of startups fail because they are unsuccessful in finding the right team. A company needs a leader who steers the company towards “greatness.” Then, there is the visionary whose ambition drives the goal of the startup.
A company also needs a band of efficient employees who are not only industrious but also gel well with others. There must be a motivator in this group to always get the most out of them.
Office culture also plays a huge role in boosting the morale of the team. Happy employees are much more productive and are more willing to take responsibility of the project. The team must be taken on excursions as part of intrinsic team building exercises. This, however, should not be forced, which may cause the opposite effect. The employees should also be given a reasonable number of working hours and incentives for meeting targets on a regular basis.
It is important to have well-defined roles to avoid confusion within the organization. The employees should realize what the actual goal of the startup is and how they’re helping in its achievement. They must be praised for the good work and told when their work hasn’t been satisfactory enough. It must be the duty of the leader to make them realize their potential. Their work must be their own and should not be micromanaged by the project managers. They must be challenged regularly so that a sense of complacency doesn’t set in.
An efficient team will lead to great success when given an adequate amount of vision, motivation, and direction. Finally, it is imperative for the team to talk to each other. Their communication is essential when it comes to reaching the company’s desired objective.
All these steps may still not guarantee success but they will surely increase your company’s chances to be successful. When done individually, these steps may be effective in their own right, but when done simultaneously, these steps may become the differentiating factor between you and the rest of the market. “Any time is a good time to start a company,” Ron Conway, a noted Startup Investor, and SV Angel once said and right he was.
Ever wonder what businesses you can start for under $10,000?