Factors for start-up success
Factors for startup success!
A critical case study of startups and their accompanying failures or less pessimistically why they are yet to succeed.
Forget the stats, you most likely clicked the link because you are concerned about the fail rate of start-ups and you are curious to know why!
In order to understand the reason why start-ups fail, we will take a look at the structure of startups and the factors that affect their successes
To start this conversation we are going to consider that for a startup to succeed
These five things are considered important.
However, the degree of their importance will be determined in subsequent posts.
Factors for startup success
- Timing
- Team
- idea
- Business Model
- Funding
Timing
Throughout the course of history, many ideas have been re-incarnated after the previous versions failed miserably.
Facebook replaced MySpace when the time was right
Youtube and a mix of others replaced startups such as broadcast.com
These are two of many examples that depict the importance of proper timing in the success of any startup. The need for complementing technologies for the optimum performance of most startups is one reason that makes
In the example of broadcast.com,
Broadcast.com existed at a time when playing videos on the internet had its attendant complexities. Browsers did not have the required video codecs and required flash players and other third-party installations. Even though this alone might not be considered as a reason for the death of the startups. It was very instrumental when many years later, other startups began to occupy and make waves in the same sector.
Determining the right time
Ease of adoption is the most critical in determining if the timing is right for a startup
Team
Teamwork plays an active role in the accomplishment of any project
In the same vein, the versatility and inclusiveness of the founding team is very instrumental to its success.
The versatility will ensure that every one of the needs of the start-up is met in-house with minimal outsourcing. This reduces the burn rate of the start-up as they work from idea to launch or from launch to traction and eventual profitability.
Basic team composition
Most startups needs a Marketer, Tech guy and the
Idea
The idea might get the most attention most time.
However, more than 70% of the time this is an illusion. The same idea that has failed several times has gone on to become a multi-million dollar business.
Business Model
The business model represents the playbook that guides the operations of the start-up. However, a tech startup can go for several years and even rounds of funding without having developed a business model
A business model might be important, but for a startup, it is important to get the product and technology right and secure funding to get off the ground before developing the right business model.
Facebook focused on developing the right product in its earlier years without killing the product with entanglements such as ads. Subsequently, after understanding the business model, it launched Facebook Ads as a professional advert agency and the large customer base acquired through years of undiluted service gave them a superior advantage.
Funding
The right idea at the right time executed by the right team using a solid business model will always attract funding
This mindset speaks to the fact that funding should not be played as King in the success of any startup
Too early funding can easily kill a startup as it could accelerate growth very fast and prove detrimental to the success of the start-up.
However, progressive funding can facilitate organic growth and serve as validation for the idea, timing and business model.
