This is often said or rather assumed that an entrepreneurship begins with a sense of optimism towards the odds that are stacked against and the uphill tasks to overcome that fierce market competition.
Often even entrepreneurs with many years of market experience and availability of funds at disposal find it difficult to sustain in the bottle neck struggle to thrive. This shall be further backed by the startups data according to which 9 out of 10 or 80% of startups burnout within the first 18 months.
So what makes those remaining 20% startups click? Do they have extraordinary talent, unlimited cash at their disposal or an inexorable product? The answer is not that straight forward. Off course those 80% failures could be avoided if it was.
The explanation can be found by digging deep into 4 core pillars that define success of a startup:
As defined by Professor Leigh Thompson of the Kellogg School of Management, “ a team is a group of people who are interdependent with respect to information, resources, knowledge and skills and who seek to combine their efforts to achieve a common goal”.
This definition seems perfect under usual circumstances. However, when it comes to a startup, it is a group of people who work towards a common goal but at times are willing to sacrifice key motivational factors such as their weekly offs and at times even their pay in order to make a project successful.
A successful team is diverse and the members have the necessary skills. They are always willing to learn new concepts and adapt to the dynamic business conditions. They have mutual respect, understanding for fellow team mates and are willing to go an extra mile for the collective vision.
This is one very important part of any successful business as it actually defines how long a plan, product or a startup can sustain for. A strategy is basically a plan well prepared by the members of management keeping the entire team in loop.
A great strategy not just only work around running a business, it also lays the guidelines around optimum utilisation of resources such as funds, tools, human resource etc. Successful startups keep their focus on reducing costs and maximising profits.
A successful startup lays their strategies around effective team building, their training and development. Only a well strategized and equipped team can outperform any challenge on any given day.
A well known fact about majority of successful businesses is the quality and the usefulness of their product. Startups with the ability to understand the market and ability to fill the gaps are often showered with love from their customers.
A product-driven company only focuses on what their product can bring to the table, striving to continuously improve it and ensuring customers get full value of their money.
Apple was largely operated on the “build it and they’ll come strategy” — they created the iPod even before the market knew they actually needed it.
The key to a successful startup lies in building a product that really fills the market gaps and challenges the norms incorporated with carefully designed sales driven strategies.
The most important aspect of a successful startup life cycle is its end user. The difference between a successful and a failed startup can be evaluated by looking at the loyalty of their customers often referred to as their Net Promoter Score. It is the percentage of customers who willfully do word of mouth marketing for the business and stay loyal to the brand.
A successful business has a strong hold on their market backed by a great product and market research. They know their end user and completely understand that retaining them is as important as creating new ones. Successful startups build their business around market acquisition, understanding what their customers need and retention.
Every startup faces a numerous risks when they launch a product or services, often failing in getting the right mix of user attention. Successful startups consider such failures as their badge of honour and learn from their experiences but a startup that fails because they value cash over customer satisfaction is likely to keep failing until they understand where they went wrong.
Conclusion: The four key pillars not only define a startup success but also create a sense of confidence among its customers. A strong foundation of these pillars can help any startup win more customers and retain the existing ones at the same time.