According to analysis, 90% of startup failed at the initial phase of implementing their business model. Thus, most startups spit out their founder at a relatively short period into establishment. Unlike the 90% failure rate, the 10% startup success rate can be attributed to the ability of startup founders to manage their team and challenges, while leveraging on startup success variables.
In order to manage any startup successfully, both its operational and financial team deserve to be given maximum attention. A good business idea or concept with funding can be great, but when the right team is lacking, such startup is by default subjected to failure. The three formulas below shows startup failure and success equation in brief.
IDEA + FUNDING – GREAT TEAM = ABSOLUTE FAILURE
IDEA – FUNDING + GREAT TEAM = RELATIVE SUCCESS
IDEA + FUNDING + GREAT TEAM = GREAT SUCCESS
There are other factors responsible for startup success, and this is what I simply refer to as startup success variables. They include:
INVESTMENT OPTIONS: In as much as most startups often require funding, it is important to analyze every available funding options in order to avoid taken up burdens which could hinder the smooth scaling of the business. Analyzing the funding options involve the Pro and Cons of every available funding, both on the short term and long term.
REVENUE OPPORTUNITY: Another variable which determine startup success is available revenue opportunity. Sometimes, the best revenue opportunity might not be within startup location, and most failed startup often don’t explore revenue opportunity beyond known demographics. Thus, to harness startup revenue opportunities it is important to always explore revenue opportunity across demographic borders and put every effort to maintain revenue sources.
ITERATIVE SCALING: For any startup to succeed, iterative scaling isn’t a variable to be neglected. Most startups fail due to lack of adaptive iteration to a changing business atmosphere. Often times, they avoid adjusting their business model beyond unacceptable unique value proposition. There are also instances where some startup retain stagnant progression for long period of time, which thus figuratively left such startup or business to no other option than failure. For any startup to succeed, iterative scaling is a unique variable to be embraced.
PARTNERSHIP: Business partnership is more like every human relationship whereby you often need friends to leverage on, toward achieving some goals. It’s often said, “if you want to go fast, go alone, but if you want to go far, go with friends“. The same principles is applicable in business relationship. Business partnership is often a vital key toward startup success, thus it is important every startup choose a business partnership which can foster the growth of their business.
FEEDBACK: Another startup killer variable is ignored feedback or lack of feedback. When a startup failed to obtain feedback, it thus by default lack accurate data to iterate or optimize toward customer satisfaction. When a customer satisfaction diminishes, the startup revenue also decline. Startup decline in revenue over a long period of time would only widen the door for startup failure. Nothing kills business as much as rigid defensive reaction toward customer dissatisfaction.
CULTURE: The last of the six startup variables is startup culture. Every startup culture determine its failure and success. A pathological culture is bound to result in startup failure. A bureautic culture (Rule Oriented) wouldn’t yield startup success as much as Generative culture (Performance Oriented).