Unlocking Success in the World of Entrepreneurship
Two-thirds of start-ups don’t deliver positive returns to their investors.[1] Over 10% of start-ups fail in the first year, and nearly 70% shut down by their tenth year.[2] When polled and interviewed, many founders of failed firms point to liquidity challenges, lack of market understanding, ineffective marketing, and poor partnership as common reasons for defeat. And while these issues can plague businesses large and small, issues may be exacerbated and downfall accelerated in the dynamic start-up environment.
Start-ups are vulnerable to issues rooted deep in the structure and business model. Therefore, the orchestration between the idea, the founders, the customers, and the investors is delicate. When one component is out of balance, the entire act can go sideways.
While a high-performing start-up is founded on a strong value proposition and passionate founders, the success equation requires more than just vision and capability. Overcoming the difficult odds requires companies and investors to consider the following success drivers:
1. Relentless Customer Focus – After launch, management teams can become easily overwhelmed by operations, at the risk of taking their eyes off what truly matters - ensuring that their product or service gives customers what they want at a fair price. Therefore, continuously requesting and incorporating customer input and feedback and monitoring customer KPIs such as acquisition, retention, and satisfaction will guide leaders in making customer-centric decisions.
2. Experience – While commitment and passion are key characteristics of effective founders, they must also possess the experience and know-how to drive success. On-demand talent is becoming increasingly popular to supplement the start-up management team with executive-level talent who can guide planning and execution. The financial commitment is flexible, and the impact can be substantial – a third-party resource who possesses deep industry expertise and executive experience can serve as the agent for objective and accelerated decision-making.
3. Realistic Milestones – Oftentimes, funding is contingent on founders committing to key milestones. A milestone in reach, but not quite met, can be the demise of a business. Too often, funding goes dry because of poor planning and an impractical view of what can be accomplished. A strategy management framework can facilitate companies’ ability to both clearly define where they’re going and what it will take to get there. By both determining the realistic measures of success and cascading the objectives into initiatives and near-term actions, founders develop a measurable and actionable strategy.
4. Strong Culture – In addition to communicating the clear and compelling company vision, a healthy culture is central to attracting and retaining top talent. Start-ups can be high-pressure, fast-paced environments. Taking time to appreciate the people and celebrate the wins will motivate the team to their next milestone.
