Building a startup begins with a dream or vision about taking something you’re passionate about and turning it into a business. You hope that the result will change the world and give you some financial freedom along the way. The chance to be your own boss is a nice appeal as well. There are lots of good reasons to try a startup, and the time has never been better.
But the picture is not all rosy. The path to startup success is fraught with lots of challenges. An oft-repeated stathas it that 8 out of 10 people who start new businesses fail within the first 18 months. That’s a crash and burn rate of 80%. Or stated slightly different, a new business owner has a 1 in 5 chance to survive past the first year and a half.
No one likes to fail, especially a newbie entrepreneur who is investing lots of cash to turn their business idea into gold. So let’s run through 10 tips to adopt today that will increase the chances of making your startup a resounding success.
1. Go Lean
The Lean Startup strategy has emerged in recent years as a refreshing alternative to building new business ventures. The focus of the Lean approach is to help startups run in a more efficient, customer-driven, and intuitive way while saving time and money. Instead of writing a business plan at your desk and pouring tons of time and money into a product that has little guarantee of success, the Lean approach goes right to the question of how to do more with less and get your product out the door as fast as possible.
2. Process vs. Product
Building a startup is a whole new path and success or not often depends a lot on the personality of those behind the wheel. Nothing against process folks, but the universe rewards those who deliver products. Revenue flows from products, not processes. At the same time, there is also a happy balance between product and process. You’ll need clearly defined processes to ensure your business and projects are running in a streamlined, efficient, organized, and professional manner.
3. Control Expenses
Startups are notorious at spending money on incidentals that ultimately don’t contribute to the financial prosperity of the business. Avoid paying too much on things like rent, labor, or materials that don’t really add to your value proposition out of the gate. Other seemingly legitimate expenses can also become a big money pit if you’re not careful. Building a big trendy website, hiring an attorney to trademark your brand, or incorporating your new business are all expenses that can be deferred since they are not helping you build revenue.
4. Build a Strong Team
As the saying goes “teamwork makes the dream work.” When it comes to making your startup a success realize that it’s going to take lots of hard work from experts in a number of different fields. You’ll need to find folks who are passionate and committed to your vision and who you can get along with and from whom you can expect great, quality work. Also, keep it small: a team size of 6 to 10 people makes life easier for everyone as it improves communications, builds trust, and improves overall efficiency.
5. Keep Innovation Front and Center
Innovation has become a big “buzzword” over the past few years and everyone is scrambling to get onboard. There is no magic pill or quick fix or easy path to innovation. It takes time, effort, focus, and perhaps a bit of luck. Whatever you do, or however you do it, keep innovation at the front and center of your business strategy. Keeping your startup on the cutting edge of the latest technology trends will increase your likelihood of success, preserve your competitive advantage, and decrease your chance of disruption.
6. Bootstrap Where Possible
A major key to a successful startup is controlling finances. And one way to do this is through bootstrapping, or paying your own way by stretching resources as much as possible. This should be your first option for funding if at all possible. Unfortunately, because of the complexity of most projects, it’s simply not realistic for most startups to self-fund. But if you can afford to slow things down a little bit and pay your own way, you’ll experience less headaches in the long run.
7. Leverage Modern Technology
There are tons of free or cheap digital tools and resources out there for improving business processes and helping your team work together seamlessly. Look into resources like Google Apps for a suite of tools such as email, calendar, online word processing, spreadsheets, and presentations; AWeber or Mailchimp to manage your marketing database/contacts; Trello or Asana for project management and group collaboration; or Evernote for clipping, storing and organizing your resources and snippets of information; not to mention Flickr, Dropbox or Amazon S3 for affordable storage for your digital images.
8. Get Expert Help
While attempting to save money and do a difficult job yourself is good and noble, it may cause you more time and frustration in the end. Develop a mindset of knowing when to have the experts step in. Freelancing is so common and accessible today that getting someone to help who can do an excellent job without breaking the bank is within the reach of everyone.
9. Keep Focused
Not enough can be said about the importance of keeping your eyes on the prize. Simply put, this means that you shouldn’t try and expand your business footprint too quickly or offer more products or services than you can comfortably deliver. Focus first and foremost on the area of your particular value proposition, on what sets you apart. Once you’ve established your main brand then proceed to build other services on top. Don’t try to boil the ocean. Stay true to your original vision and leave the bells and whistles for later.
10. Don’t Be Afraid to Fail
Failure is not all bad if you can learn from your mistakes and turn them into teachable moments. Failing fast is an approach that recognizes that some of the best accomplishments arise out of hundreds of failures; innovatively this means that failing quickly can also lead to fast learning and better chances of success.
At the end of the day, the success of your new startup will come down to a few core principles. Keeping your dream alive, spending funds wisely, persevering through the difficult times, building a great team, and staying focused on your value proposition are probably the best ways overall to increase your chances of building a successful startup. But there are no guarantees. Oftentimes, victory just comes down to people doing more things right than wrong. The best thing you can do is do the best you can!