Article is written by Mr. Sumeet Jariya
Successful startup stories are inspiring and morale-boosting. Those stories kindle the feeling within us to get up and achieve something much bigger. However, it is the success that always stays in the limelight as compared to its counterpart – FAILURE. More than 80 percent of the startups fail within the first 3 years while 98 percent of them are shut down before they could celebrate a 10th anniversary. It is natural for humans to seek for success stories as they fill us with positivity and motivational high. Yet, it is from failing that we learn more than we do from winning. Building a successful company is a multi-factorial play where having courage still stands to be the most important one. There are many factors, but to mention here are top 5 factors which can lead a startup into doom.
A team is a heart as well as the brain of a startup. More than 4 out of 10 startups fail because they didn’t have the right team. Almost all investors consider the team key criteria for deciding whether to invest their funds in a startup or not. This is because it is the execution of the business idea by the team that will eventually decide the fate of the company. It is necessary that all the team members understand the idea and are equally passionate about it. Along with this, it is also necessary that the team is a vibrant mixture of people with different skills like creativity, productivity, long and short-term thinking. So, along with looking for the next disruptive idea, it is more important for an entrepreneur to look for a disruptive team which can execute the hell out of an idea.
Thirty percent of the startup’s shutdown because they run out of cash. When planning the execution, the focus needs to be given on the art and science of converting an idea into a thriving business rather than just the idea or concept. An idea need not be completely crystallized, it should always be evolved and improvised. Following the concepts of lean marketing and minimum viable product (MVP) can help startups understand the need of the market and accordingly can improvise their products. Looking into the successes as well as the failures of competition can help in devising a good implementation strategy.
Values of the Entrepreneur:
Napolean Hill once said, “Patience, persistence, and perspiration make an unbeatable combination for success.” There are many dark days in the life of an entrepreneur when the workload seems overwhelming. It might seem like pursuing a lonely and dark road and that is when having faith in yourself and courage in your heart to keep going matters the most. Entrepreneur breakdowns and weak leadership skills can lead a startup directly to the valley of death. Having people skills and emotional intelligence is crucial to manage the team effectively and keep it functioning. If you lack these skills, GAIN them! Successful entrepreneurs are those who have invested huge chunks of their time in personality development. Also, the presence of a trusted and experienced advisor or mentor can have a strong influence on the faith of a startup, especially when the entrepreneur is young.
Many startup founders underestimate the value of marketing. They put a lot of effort, energy, cash in developing a great product and launching it with great enthusiasm. In this process, what they tend to forget is the most important aspect of a business that comes post-production – MARKETING! Any product needs a vigorous marketing strategy for it to be a success, regardless of how unique, innovative or disruptive it is. When devising a marketing strategy, it is better to have a niche market rather than a very wide one since it helps in budgeting the marketing plan and getting more conversions while investing less.
Time of Execution:
Time of launching is a critical factor that determines the success of an idea. Let’s take an example of Uber, the problem that they are solving has existed for many years, if the same idea would have been launched 15 years earlier from now, it would have been a major failure for the simple reason that the penetration of smartphones and the internet was not strong at that time. When planning the implementation of a business idea it is necessary to understand if the market is ready to take it.
Mr. Sumeet Jariya
(Startup Incubation, Business Planning and Industry Research)