- The average age of a ‘Startup Promoter’ is way below traditional company heads
- Pointers are divided into three progressive buckets – hygiene, success quotient and scaling up
In my current role I have the unique opportunity of partnering with several startups in various stages of growth. Working with a cross section of such companies representing multiple domains and categories, I have found several unilateral as well as ubiquitous factors that determine their success.
Needless to say the startup phenomena is on the rise in most modern economies the world over. It is also a matter of pride that India currently ranks around third on several parameters in the startup space globally. While Investors, VCs and Angels are fuelling this growth by injecting substantial funds into novel ideas, the story is not all hunky dory when you look at the big picture. The stark reality is that only a tenth of all startups actually succeed.
Leading VCs with portfolios of 15 to 20 companies will acknowledge the fact that in reality they only have two to three stars in their portfolio that are the game changers. Set against this competitive backdrop, startups have to rationalize and be game changers in order to compete with the best not only locally but with concepts and ideas from around the world.
Featured below are the fundamental ingredients that are a must for any startup to bloom in today’s day and age. It is no secret that this sector is fast evolving and has taken shape only in the past half-decade or so. It is also pertinent to note that the average age of the startup founders and promoters is very young as opposed to traditional brick and mortar companies where greyhair is typically a prerequisite for leadership.
While many of the points below may sound rudimentary, in reality they are tantamount to success and can also serve as a checklist to monitor ones progress during various stages of development and growth.
Hygiene
Talent – This may sound like a ‘duhhhhh’ statement, but trust me not all have it in them to successfully build a company. At the cost of sounding judgmental I urge one and all to evaluate themselves to see if they have what it takes to see through the lifecycle of a company. While they say every individual cannot become a Sachin Tendulkar, you do have the option of becoming a Dhoni or a Ganguly or a Dravid depending on your qualities.
Passion – Fire in the belly, drive, hunger to do business are some common phrases that define passion at the work place. All heads of successful startups that I have been in touch with have a distinctive glint in their eyes. This comes from their undying passion to make it happen despite any odds.
Vision– An eye on the future and your long terms goals is crucial for any journey. Only those drivers with a futuristic vision can achieve success as it means providing purpose and direction to the scores of individuals who will be impacted by the company either directly or indirectly. Vision comes from deep commitment and a passion to succeed.
Aptitude for calculated risk – Nothing in life comes easy and in the words of Mark Zuckerberg, “The biggest risk is not taking any risk... In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” I think his quote summarizes it all, especially coming from the big man of startups. Individuals who can stomach risk and face the churn that the industry throws will eventually succeed.
The Big Picture – Startups need to develop the uncanny knack of seeing the ‘Big Picture’, as successful companies are those that manage to deliver scale in an evolving economy and market place as a result. Developing the ability to view the larger challenges that impact a segment as opposed to miniscule problems could decide the success or failure of an idea. Typically addressing the larger issues will take care of the smaller ones.
Ability to identify chinks in the armor – Any business will face its own set of challenges either unexpected or otherwise. The ability of the owner to preempt and tackle such challenges in a timely manner will aid in the smooth functioning of the company. In my opinion, this requires problem identification and solving skills which are crucial for the success of any venture.
Success Quotient
The Idea – Just anybody can come up with an idea, but identifying the ‘Million Dollar Idea’ is the real challenge. Discovering the niche void that requires a solution and building it in a timely manner is the key. I believe that this should be at the core of any business proposition and all the more in the case of a startup. An idea typically does not arise from suggestions from your friends or family but is usually from a Eureka moment resulting from intense research and understanding of a particular segment or challenge.
Insights– This is something that needs to be at the heart of any business plan or concept. Gauging and identifying insights normally comes from years of experience and training, however it is the successful few that manage to master it at an early age. Insights normally arise out of intense research and understanding of a particular segment or space. Leveraging these insights to drive a master plan will be crucial to a startups success.
Technology enablement– The ability to apply modern technology to common place challenges is the most routine formula for a startup today. However, to be on top of technology trends that can be expected in the coming years and to successfully apply it to a solution today will ensure the growth and success of the company in the years to come. For instance, the increased bandwidth and mobility over recent years have spawned a deluge of companies in multiple segments. One can even say all e-commerce giants of today are a result of the early prediction and adoption of the e-commerce model.
Vertical Orientation – This is the era of vertical orientation and large firms are trying to specialize and grow their businesses through this route. This also increases the chances of a startup getting acquired by larger firms when the market is ready. Developing ideas in niche areas and then building a high level of vertical leadership is a foregone formula for success.
People Management – Despite the proliferation of technology and advances in overall quality of life, people continue to be the backbone of all businesses small or big. Growing a company from the ground up requires seamless people management skills that are deep rooted in mutual respect and in the understanding of colleagues and their aspirations. I have often come across companies struggling to retain talent especially when they are on a growth mode, this could be due to the lack of focus shown towards this area or due to poor skills. Whatever the case, people are crucial for startups and special care needs to be taken to nurture them.
Business Acumen – Finally, a practical understanding of business is a prerequisite for a successful business startup. I don’t mean to imply that you must be born in a family with a long lineage of business but more so an aptitude to cultivate skills in this area and to apply it to your passion. However, one must also be ready to acknowledge lack of depth if need be and to reach out to professionals at the right time during different phases of their business growth.
Scaling Up
Hands on Approach– While one may have a brilliant business idea that is supported by technology and the right team, however ineptitude in scaling up can reverse all the good work. One of the fundamental requirements to address this is a ‘hands on’ approach. Substantial involvement by the founder in all aspects of functioning will ensure control during the scaling up process with limited anomalies.
Thought Leadership – The growth phase also demands for suitable positioning of the brand in the eyes of the world. Building suitable thought leadership around the brand, its attributes, the segment and the promoters will ensure credibility and the much required TOM recall. Leveraging the services of a communications or PR partner could be the solution to help you in this phase of the journey.
Ability to adapt – Flexibility is the key word for today’s organizations in the cluttered market place. Success and failure could be decided by the ability of a firm to adapt seamlessly to changes in the market place and not to mention competition. Like the centuries old adage ‘change is good’, companies must be brave to take decisions that suit the growth requirements of the company while braving the consequences.
Organic vs Inorganic – Pursuant to Flexibility and decision making in a firm is the ability of a company to fast track growth at different points. Options are the organic or the inorganic route as is the industry norm in the case of startups. On achieving a certain level of scale in the organic growth chart, startups can begin considering the possibility of acquiring smaller firms that complement their growth.
Perseverance – Finally, last but not the least, perseverance is a sublime quality for success among startups. While one may think this is generic, I for one believe that this is an important ingredient for a startup considering the volatility and vulnerability of this segment. In the words of Victor Hugo – ‘Perseverance is the secret of all triumphs’.
In essence, while the ‘startup-osphere’ is buzzing with life at this point, this also means that there are challenges aplenty. The actual success rate of startups is a miniscule percentage when compared to the actual number of companies being launched. This article chronicles my observations of the qualities that are displayed by successful brands in the segment. While there is no easy formula, there is definitely scope for more and more ideas considering the advances in technology and the vast potential in our country. Success for a startup in my book will be determined by the ability to inculcate the above mentioned hygiene factors, success quotients and scaling capabilities.