5 Steps to Becoming a Successful Start-Up
As I have previously written in another article, 90% of startup fail. Most don’t make it beyond the 2-year mark.
BUT: If I have a bright idea, how can I make sure to be successful? Are there any key learnings and best practices that can help me? What are the essential things to consider?
I have had the fortune to work as an innovator, disruptor and business leader for many years, and in addition to my own eight startups, I have also been an advisor and mentor to about a hundred other startups. Working with innovation ecosystems and engaging with other entrepreneurs and advisors, you can also draw a lot of expertise and learnings. At various occasions I have also participated in panel discussions on the topic. Here I am drawing some key learnings for five aspects that the startup community also considers vital for success, something I have touched upon in earlier articles.
1) Have a strong and capable core team (TEAM)
Over and over again, when I am asked about what is the most important asset, I have two words as an answer. My team. This is core in terms of having the best possible chances of succeeding. Investors are looking at the robustness and capabilities of your team. if everything has to go through you, how will you be able to scale?
2) Focus on your local market in your market launch (MARKETING)
When you have your big idea and identifying the market gap, then you are probably also quantifying the market size from various sources. The Total Addressable Market (TAM) might be huge (and is of course highly relevant in the context of scalability), but keep your focus on your own local market (SOM, Serviceable Obtainable Market). Here you have your first users, who will help you with their feedback to create the MVP and beyond. These users a essential in terms of helping you to build value, early pivoting and to ensure you are providing something that is valuable for the market.
It can be tempting to go early to other markets, whether adjacent geographically or more distant, e.g. from Europe it might be natural and tempting to go to the US market. But any new market introduction is costly and requires attention! Do it when you are ready. Your credibility will also increase both from customer and investor standpoint, seeing that you have built a solid local market acceptance.
3) Diversity is an asset (TEAM)
Diversity is a business opportunity! Never forget that. The natural interest for various sectors can be gender-weighted as an example, but what most peers emphasize is that a diverse team — gender, race, nationality, experience, background etc, is an incredible asset. This can help to remove blind spots and support solving critical problems, so think about this when you are building and expanding your team. Competition is global and you need to think global (even if you do your market launch locally, see above).
4) Don’t build everything yourself (PRODUCT)
You are trying to build your MVP and as an entrepreneur you want to be in control. But that doesn’t mean you should micro-manage and do everything by yourself. That will impede your time-to-market, you might get a burn out yourself on the way and there are high risks that you will fail. Assess what is critical activities and core for your product. Keep that in-house. But also remember that if you are disrupting a market, a business solution, it is not just about the product. You need to change mindsets. You need to collaborate with corporates to get access to their vast network. That means changing set common practices. Disruption with impact comes if you succeed with this.
5) Get a functional MVP before expanding (PRODUCT)
Your early users are key in providing you the feedback, that will allow you to build the MVP and do early pivoting, if necessary. Always focus on solving a problem, providing value to users. Then see what tools (e.g. artificial intelligence and machine learning) and methods that can support you to make this unique, have superior user value and experience and give you a good launch. To my team, stakeholders and investors I many times come to express “don’t love your product — love your business”, meaning that be sure to bring excellent user value and pivot when that is useful.
Is that all?
Absolutely not. As you might have noticed, there is not funding mentioned a single time. This is of course also essential if you are to fulfill your dreams and build a market leading company that is disrupting markets. Having the right team, that is able and capable of building both the product and company, you will with the right marketing be able to attract those early customers giving you feedback and then starting to pay. Having market traction, the right team and a business that is scalable will also find attraction with investors for the funding part. Remember always to be genuine, believe in your big idea and have the stamina to stay on for not just the launch, but to go for a scaleup phase. Over my years of being a successful entrepreneur, I have built the Black Diamond Scaleup Strategy as my playbook. I keep on improving, detailing and adding aspects to it, as every business cycle and startup is unique. Continuous learning is required.
Good luck with your venture!
/Mika
