Living in the world of startups can be extremely challenging at times. Most startups begin with great momentum led by the founder who has the motivation and passion to lead the way to what seems like endless possibilities and unlimited growth. But, as most people that work in a startup company know, this momentum can gradually fizzle out and you are soon treading water in a stagnant pond that seems to go nowhere. With limited lead generation and a product that creates value but has the potential to create even greater opportunities.
Tank Stream Labs have been at the forefront of helping to facilitate growth for tech startups for close to 10 years now. Here are some of the secrets to success we have witnessed that have contributed to the continued success of startup companies.
The top three factors
1. Market and timing
A great startup continues to analyze the market and its potential customers to see how it can continue to capitalise on market share. It is not only about the size of the market, although this is a very important factor to consider, it is also about timing. Some startups are underprepared for the most opportune time to enter the market or they have not considered the most appropriate time to launch in the market, so they end up launching too early or too late. Timing is everything, as we all know. Being first to market with an opportunity that presents itself or a new product is a huge factor in the success of a startup. This is even more critical in the technology sector where innovations and technologies are continually evolving. Great startups are continually assessing the market and are ready for the changes in the market and technology.
One of the most important factors to a successful startup is the founding team. Not only is the founder/founders the driving force behind the business, but also directly responsible for building the team that will be behind driving the growth of the business. Extensive research has identified that the founders of a product can be more important than the product itself. This is largely the ethos of accelerator programs that only invest in exceptional founders, and not necessarily just their product offering. Rothman’s research showed that one of the factors why the founding team is so essential for startups growth and success is the knowledge, experience and network that they bring to the startup. We all know the failure rate of new startups is extremely high (approximately 90% according to statistics from Forbes). Research from Rothman’s highlighted that this is often due to issues within the founding team, and less about the actual product. We refer to this as the execution of the business by leadership (founders).
The success of a startup is not the sole responsibility of the founders. A significant factor in building the right team with the right skills bringing experience and valuable skills that assists the founders in driving the business forward. The team that founders put in place can ultimately make or break a business. A successful startup needs a strong team to contribute and deliver on the company's goals and objectives. Think of high growth companies such as Apple, Hubspot, Salesforce and PayPal whom all have in common the value they place on the right people in their business, and continue to invest in their employees. This has been a growing trend over the recent pandemic with businesses putting employees first. Providing ‘value add’ benefits will only become more important and a key differentiator in attracting the right talent to deliver on these business goals and objectives.
They get going
It’s in the nature of entrepreneurs to be perfectionists, after all, they have analyzed the market and identified solutions to existing problems or created an existing product/service even better than the competition. They continuously work on perfecting their product and services to the best of their abilities and want it to be perfect before moving forward. Slow-moving startups often take a long time to plan and execute.
Now there is nothing wrong with wanting perfection unless it becomes the main focus and limits the company growth ambitions. High growth companies also strive for perfection, but they realise that this is often unrealistic and getting to market is most important. They learn from their mistakes and then move forward again with more knowledge and experience on what does or does not work for their business.
They continue to innovate to be great
In today's ever-changing markets and technological advances, great startups continue to innovate where they can. There is no aspect of their business that is too small to innovate. A great business knows that innovation is a continual process, it does not finish once a product or service is launched into market.
They know when to outsource
An efficient startup knows how to spend their time wisely and focus on the most important aspects of their business. While it is always ideal to find a skilled individual for a full-time role, high growth companies also know the importance of outsourcing particular areas of the business. By strategically utilising outsourcing in their business, whether it is building a website, or essential, but time-consuming admin tasks means they can focus on the important parts of the business or the parts are that aligned to the current team. It can also be more cost-effective for a business to outsource particular roles or tasks. At Tank Stream Labs we as a business have had great successes outsourcing through various companies and platforms so we can spend more time on bringing value to our members.
Their customers are the key
Without customers, a business simply does not exist!!! Successful startups are the ones that develop innovative strategies and navigate impacts to the markets they operate in to retain and increase customer engagement. Customer preferences and requirements continually change. Technology has a big impact on building customer relationships and loyalties so startups have to use this to their advantage to manage customers expectations.
They successfully manage cash flows
Every startup has to understand the importance of cash flow…. Cash is King! A common issue faced is that startups do not adequately forecast their cash flows factoring growth plus also any unforeseen issues i.e projects can take longer than predicted, costs may be more expensive than forecasted, mistakes can happen along the way, customer demand may take a little longer to gain traction than expected etc. Successful startups ensure they forecast their cash flows as far out as possible plus raise sufficient funding to support their growth plans. A startup company should always be thinking about their next capital raise, even if they have recently successfully completed a raise.
Now there are many ways for a startup to become successful, and there are no set formulas to become successful. All businesses are impacted by different external factors depending on the market they operate in. But by understanding how successful startups have achieved their growth will provide many valuable insights that can be adopted within your business.
If you have any questions on this content or want to speak with a member of the Tank Stream Labs team, feel free to reach out at firstname.lastname@example.org.