Start-up culture has been around for a few years now but there has never been a better time to be one.
Today governments all over the world look up to start-ups as a key solution to their unemployment issues which has resulted in a robust machinery making it easier than ever to start a business.
Despite such great strides in ease of setting up a start-up, the one fact that has remained consistent is that only some start-ups make it big and others do not. There are common factors that apply to all businesses including start-ups like availability of funds, cash flows, market forces, regulatory challenges, operational issues etc. But they often result from some other core concern and kick in later in the business life cycle of a start-up.
Based on my experience of having my own start-up and working with a few others closely, I came up with the following list which I feel sets apart the few successful start-ups from most that fail.
Having a great idea or product can be a great starting point but never enough. in my opinion, having complete visibility of where you want to reach the first & most important prerequisite to success. Having a crystal-clear vision can do wonders.
Your vision can be about productivity, reach, customer satisfaction, or anything else important to you and your business. Vision should always, at least in part, be about revenue & profitability. I love to reflect on this quote every time someone talks about a vision statement.
Measuring Success & Failure
Once you have a vision, you must make sure you are always progressing towards it.
But you can only ensure progress if you measure your success and failure regularly. This requires defining ‘Key Performance Indicators’ or KPIs to watch out for. Social media following, customer satisfaction metrics, production numbers etc. can be some KPIs important to your business.
But make sure to throw in at least a couple of KPIs connected directly to your bottom line, ROI & Cash flows.
All start-ups begin operations with limited cash usually drawn on your savings, retirement funds or loans from family & friends. The amount of cash you start out with is not a big concern because most start-ups are in the same boat as you.
A common mistake that most start-ups commit is to spend where it not needed and then have no money when it is truly required. It is almost impossible to recover from there.
It is important to make sure that every penny in that humble purse is put to the best use possible. The only way to ensure that is that we start with a well-planned budget and allocate all our cash before spending it.
A simple but important consideration when creating a budget is the ROI that your spending will generate.
Just like everything else discussed so far, there is no replacement to a Winning Strategy.
To have a winning strategy thorough Market Research is where you want to begin. Understanding the market will help you in
- Knowing your competition
- Creating your content & communication strategy
- Pricing your offer
- Identifying your Buyer Personas
What Problem Are You Solving?
At a seminar I once had the pleasure of listening to Mr. Rahul Sharma, the co-founder of Micromax – an Indian smartphone manufacturer. He said that he approached every new idea by understanding the problem that idea solved. His words have stuck with me ever since.
I believe that the best way to coming up with your strategy is to ask yourself ‘What problem am I solving for my customers and the market?’
Some start-ups are founded by young college graduates while others have seasoned, experienced professionals at the core. I feel that irrespective of your experience all of you can use some mentoring. It is ideal if can manage an industry expert to mentor you. But that is easier said than done and that should not be a deterrent to success.
The best mentoring can begin at home. Start by discussing your ideas and progress with family and friends. Reach out to trusted people around you and solicit their feedback regularly. Sometimes an outsider’s view can show the best path.
When you look for feedback you must be open to change.
This can be contradicting because first I ask you to research thoroughly, firm up a vision & stick to it and then I ask to be flexible. It can be a difficult balance to strike but will be the defining difference between success & failure.
Solicit feedback – treat it on merit – change your course, if you must – then do it swiftly!
Belief & Passion
Self-doubt is a common human emotion, evermore when you are treading unchartered territory.
It is not uncommon for start-up founders to have moments of doubt or lack of belief. Having these moments is normal but one needs to snap out of them quickly.
Setting you expectation correctly can go a long way in avoiding self-doubt or dealing with it. Every start-up founder has a certain degree of ambition else he or she will not be here. But over ambition & over expectation from self can be overwhelming and lead to disillusionment.
Having a clear vision & strategy should take care of expectation setting for the most part but keep reminding yourself that even if you want to be the next Facebook or Amazon it will not happen tomorrow!
When in doubt, remind yourself that you have all your basics right and success is round the corner. Then persist with that thought and keep doing the job!
Passion is the magic ingredient that can be difference between good & great. As an entrepreneur, especially as a start-up founder, you must eat, drink, sleep & breathe your business goal. Such passion will not only ensure success but speed up your progress tremendously.