When it comes to kicking off a startup, everyone begins with a vision: the opportunity to turn something they’re passionate about into a business, the chance to change the world, the freedom of becoming their own boss . . . to name just a few. Keeping your dream alive no matter what the odds is probably the single most effective way to succeed. But you can’t quantify or measure the kind of tacit knowledge that goes into making it all work. Oftentimes, success just comes down to people doing more things right than they do wrong.
You’ve probably heard about the dismal failure rate of new startups. Research says that roughly 8 out of 10 people who start new businesses fail within the first 18 months. Not too encouraging, is it? Let’s turn that idea on its head and run through some of the strategies about what it takes to make a startup succeed. This gives us a much better psychological advantage and keeps us in a mindset that is positive rather than defeatist.
Go Lean: The “Lean Startup” strategy has emerged in recent years as a refreshing alternative to the traditional approach 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. According to the Lean Startup website, “The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.” 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.
Process vs. Product: Different personality types lean towards different sides of the spectrum. Some folks get lost in “the process” while others are more pragmatic and focus on outcomes. 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.
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.
Tools & Resources: Let’s face it, technology has dramatically transformed the way we work. And in order to work most efficiently, you must be clued into the great selection of cheap or free online tools available today for the digital business. Kudos to Jonathan Woodward for his excellent article, 101 Guide to Running A Lean & Agile Business, which provides the following list of helpful resources:
Google Apps for a suite of tools such as email, calendar, online word processing/spreadsheets/presentations, and more.
AWeber or Mailchimp to manage your marketing database/contacts.
Evernote for clipping, storing and organizing your resources and snippets of information (doesn’t have to be digital – snap photos to digitalize and upload online).
Keep Innovation Front and Center: Innovation has become a big “buzzword” in business circles over the past few years and everyone is scrambling to get onboard. Technology progress means that innovation is now happening on a scale never seen before . . . and so is disruption. Keeping innovation at the center of business strategy will ensure that your organization remains on the cutting edge of the latest technology trends. Leaders must make frequent assessments and inventories about where they stand on the innovation spectrum.
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.
Preserving Your Mindset: Becoming a successful startup owner in today’s digital global economy requires, quite frankly, a different mindset than was required just 5 years ago. Technology is changing so rapidly and is, now more than ever, a key differentiator in all lines of the business cycle. Staying lean and agile and keeping eyes and ears open to the emerging and disruptive changes in the market place requires insight, open-mindedness, quick thinking, and decisiveness in order to pivot and make adjustments when necessary.