Startups are full of excitement and Innovation, but the downside is they are also full of risks and ambiguity. On one hand, there are excellent ideas that somehow never get going while on the other hand, a lot of dubious ones turn out to be huge successes. Some entrepreneurs focus only one innovative solution to the problem and miss to prepare an innovative business model to have a successful startup. There should be a complementary pair of founders to come up with technical as well as business solutions.
Michael Gerber introduced this concept in his book E-Myth, which states that most startups are started by founders with core technical skills, rather than business skills, which results in lofty failure rates. Since both the skills are equally important for a startup to thrive, the single founder failure rate has increased up to 50%.
If you look at a list of successes and failures, it will be hard to identify one single reason why a particular startup succeeds and the other does not. So, the big picture is still a puzzle. That’s because there cannot be any particular reason for company’s success or failure, there will be plenty. And some of the factors are mentioned here.
Some of the myths that can be the cause of failure are mentioned here.
- A great technology will result into a great business.
- If the product design is great, investors will find us.
- Business skills should be applied only after the product is ready.
- Marketing is essential to sell even the weak solutions.
- Solutions to improve previous solutions have no competition.
- The way to attract masses is through providing free solutions.
While some factors resulting in successful startup can be:
The idea: The idea plays the most crucial role in any startup’s success. If the founder’s idea is strong enough to convince investors and feasible enough to be implemented, chances of success get much higher.
The leader: A skilled and experienced leader can make the decisions, set the vision and motivate his team to work harder to achieve organizational goals.
The team: Startup founder alone will not be able to make a difference in his business, he will require a team of skilled people to accomplish any task for the business.
The capital: Working capital is really important; you will require your initial funding to get the things done. Personal or familial funding is also an option.
The business plan: You will require a thorough business plan in addition to the core idea. It will include your targets, your goals, your operations and much more.
The execution: Executing the plan is more important than getting the perfect business plan.
Handling the crisis: No matter how good is your plan, something will go wrong. How you respond during a crisis will decide the company’s fortune.
Successful startups may require critical thinking of the startup founders, and a well-prepared business plan, which shall be executed within specific time frame. Founders shall retain the growth pace of their business adopting a competitive spirit.