Ever wondered what distinguishes a great business from an ordinary one? or what makes a start-up a true winner? well there is a million dollar question right there. If there was a ’success-o-meter’ that proposes the likelihood of a start-up succeeding versus failing, I am sure all the VCs and investors will own one regardless of how much it costs.
I can’t tell you i have the answer to what dictates whether a start-up will succeed or fail, and i doubt there are people who will definitely tell you that this is the formula to determine that. However there are certain telling signs that are common with successful start-ups and I will be sharing the most common here. If you know of any others, please feel free to add them down in the comments section. I am sure we can all learn from each other. I once heard Guy Kawasaki say that in the business of starting up companies, no one is an island, no one knows it all or has all the answers…and I absolutely agree with him.
Naval Ravikant of venture hacks once pointed out that for him and many other investors, the first thing he looks at is the team behind the idea and then the idea. Other people I have heard say the same thing are Chris Sacca and Martin Zwilling amongst others. What does this say then, team is more important than product?Personally I believe the two must go hand in hand if you are to be successful. But last week I was having a conversation with Ken Foster, a serial entrepreneur based in London, about the key to a successful start-up and the one thing he said that hit home the hardest was “a great team can make a crap product work but a crap team will ruin a great idea”. So the first on my list of things I believe make a start-up succeed is the team.
- The Team: A start-up that will succeed will have able people running each and every aspect of the company. It will have dedicated people who are willing to put in extra effort if it is needed and will do anything to witness the start-up succeed. These people will also possess some experience in the role they have taken up. Now as far as experience goes, some rookies have done awesome with several start-ups, however, it is important to have a good mix of experience with your gen y imports. It is absolutely invaluable, the effect experience can have on the fortunes of a new company. Infact most investors you will talk to will tell you they don’t care about your idea, i have been told severally “Tolu, I don’t invest in ideas, I invest in people”. go figure.
- The product/service: If you are building a start-up, you better make sure whatever you are offering meets the needs of the public…if not, you have wasted money, effort and valuable time. Regardless of how smart or innovative you are, you better survey your market and ensure that your product/service is solving a problem that already exists. Most VCs you pitch ideas to will often ask you: what is the problem? what is this product? and how does it solve the problem that exists? They are only asking because they have learned from experience that if it isn’t broke and you try fixing it, the chance of you failing is alot more than you succeeding. Steve Jobs is regarded as a great thinker, an innovative entrepreneur and alot of people look up to the lad but he did hit his head against the rock with NeXT Computer didn’t he? people weren’t ready for it and he failed to understand this, hence the failure. In a nutshell, your product/service better be satisfying some hunger or you will crash and burn.
- The Market and your marketing strategy: Some products work for a certain market but will barely make a sale in another. If you come up with some sick Nike-esque kicks designed for women in their 50’s ( i am sure no one is dumb enough to do this, right? well you’ll be surprised), I am sure, so sure you will never succeed in business generally… well, except if you go re-tune your thinking methods! A start-up that will succeed makes sure their market will respond to their product and they come up with genius ways of selling it to them. I was watching CNBC last night and they were discussing Snuggie (the blanket thing with sleeves you see them advertising on tv), and believe it or not the guys that came up with that stuff have banked tens of millions of dollars in the little time they’ve been in business. They took an idea that is really not out of this world, but sold it to their market so brilliantly. They picked the beginning of the fall season to start advertising on TV and their ads were so novel and ‘cool’ that everyone found it appealing. I know people who bought the thing just because they liked the commercial on TV! In a nut-shell, your marketing strategy goes a long way in deciding how successful your business will be.
These are the top elements (in my opinion), that I have seen successful start-ups possess. If you know of any other, feel free to share. I am always looking to learn.
