Do you often get good business ideas but find yourself wondering about what really makes a startup successful? There are various examples in the market surrounding startups. Some of them are startup success stories and some of them are lessons for us all to learn from. So what ensures that our startup would be a success?
A startup can be as dynamic as it gets but the best part about is that your startup is going to work the way you want it to. The factors to startup success can be many and of different types too. Some of these factors can be external over which you have little to no control. While on the other hand, some of these factors can be internal which you can decide and work on. Let’s look at the five key factors to startup success -
5 Factors to Startup Success
1. Vision
A vision is THE most fundamental thing to start your business with. The vision determines what your business is going to be about and where you want to drive it to. Your vision can be to be the biggest brand of eyewear. Or your vision can be to be the one-stop solution for education. Or you can have your vision oriented towards being a sustainable clothing brand.
Having a vision in place is extremely important as your business model and your marketing strategy completely depend on it. So if your vision talks about sustainability, then your marketing strategy would capture the emotions of giving back to mother earth in your potential customers.
2. Team
Jack Ma, the founder of Alibaba, once explained the importance of a team and said, “If we are a good team and know what we want to do, one of us can defeat ten of them.” He also explained that as a founder of your startup you need not know everything in detail but must have the capacity to hire the right individuals and lead them under your vision. Ma also spoke about hiring people smarter than him and said, “When I hire people, I hire the people who are smarter than I am. People who four, five years later could be my boss. I like people who I like, who are positive, and who never give up.”
Great teams build tremendous products. Great execution is what differentiates a start-up from its competitors. Similarly, a well-designed workspace makes us work smarter and more efficiently.
Facebook also came to be because of great execution. In its early days, it faced enormous competition from other social media companies like Myspace and Friendster. Myspace was particularly huge and seemed unimaginable to beat but great execution triumphed. You can go ahead and about these key attributes for acquiring an entrepreneurial mindset.
3. Market Research and Analysis
Bill Gross, the founder of Idealab, identified another aspect to be crucial for the success of a business. Like the timing.
According to Gross, the timing was equally determining in the factors to startup success. In this example, the timing means whether your business model is early, late, or right on time for the market.
As the market keeps on changing, the demand for various products and services changes drastically. Therefore, according to Gross, you must research well enough to know whether your idea is ahead of its time or if the market that exists today is ready to receive it.
Airbnb's idea was insane to investors. The thought of people renting their houses to strangers didn’t make sense. So many smart investors avoided it in the beginning.
What made the idea work was the timing. Airbnb came to be at the height of the recession. People needed ways of making money. Renting personal space to a stranger for extra income made sense.
Discussing your marketing strategy ahead, you must ensure to capture the right emotion in your potential customers. Take, for example, the brand Jeep that uses the tagline “More Than Just Words.” If you study their marketing strategy carefully, then you’ll notice that they invoke a sense of patriotism and have branded themselves around it. Similarly, an effective marketing strategy is based on the vision and what your target audience aspires to be.
4. Business Model
A business model comes under the execution of your vision. Even if your idea may be common in the market, your business model can be very different from the others. For example, the idea of your startup can revolve around selling books. But your business model determines how you are selling books? Are you letting them order online, are you tying up with cafes and restaurants where people can rent books? Is your business model about selling book combo as gifts for birthdays, anniversaries, functions, etc? How sustainable do you want your model to be?
Reid Hoffman is the founder of LinkedIn. When he started LinkedIn, it wasn’t the only job board. There were other similar companies. In the end, LinkedIn came at the top.
Another example is selling shoes. A simple business model is opening a shop and selling shoes. Another one could be selling it online. Another one could be customizing your shoes. And did you know that there is a startup that works under the business model of sustainability? That startup asks its customers to send back the shoes after they no longer can be worn to prevent waste pollution due to the debris of the shoe industry. Now even though, they are selling shoes just like any other business venture, this particular startup is making people feel as if they are contributing to the environment in a way.
5. Resilience
The first few years of your startup are going to be the testing years of your entrepreneurial journey. Not only will there be many lessons to learn and improve on but also hard times where you may feel like giving up. Sometimes external factors like society, personal life, family, and finances also lead a person to end their business venture and give up on their startup. But remember this before you start - Resilience is what will keep you going. Remember that you always have the choice - whether to continue or give up.
Similarly, there are many ways that you can fund your own business. Hence, the funding of your business must not be hindered due to a lack of venture capital. A must-read book, The Minimalist Entrepreneur: How Great Founders Do More suggests that sustenance without venture capital is possible. The author, Sahil Lavingia, the founder of Gumroad, further explains how building a business is possible without venture capital and gives a simple step-by-step account of how it is done. Take Gumroad’s example. In March 2021, Sahil raised $5 million for his business via crowdfunding. Learning how to efficiently categorize and track your business expenses would also go a long way.
The Conclusion
The above-listed points are the five most basic aspects that you need to know about the factors to startup success. But your story need not be limited to them. The beauty of startups is that they are free from any textbooks or standard operating procedures. You can play around with your startup idea and make it unique to you. Therefore, go and build your own startup success story now!
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