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Success and Failure Elements of Startups

Success and Failure Elements of Startups

  • May 10 2021
  • 5 mins

Success and Failure Elements of Startups


The primary determinant of the success of a startup is its growth with the ability to sustain and thrive. It is also that 60-70% of the ventures fail due to premature market entry and attempt to scale up. It is essential to understand the factors that help startups take wiser, data-backed decisions and mitigate causes of failures:

1) A startup that gets mentored by meaningful and high-impact advisors can grow 3-4x faster and raise money with less time to market. Founders are pulled in many directions by many advisors. However, for enhancing the startup success, the guidance, and support of the right mentors and venture partners, whose first task should be to ensure that the founder’s time is invested wisely. Further, a strong rapport between the mentors and the founders can provide the startup with a network and roadmap that reduces their chances of failure.  

2) For successful ventures, execution skills always top over intellectual property and first-mover advantage: Over 60-70% of startup founders eventually realize that execution skills are always a more significant competitive advantage than technology and intellectual property. Every entrepreneur starts with an idea they strongly believe in strongly; however, faster they realize that the concept, product, and market viability can only be practical if there are best in class execution elements.

3) If the startup is making something deeptech, the acumen of the Technical co-founders is critical to the company. The challenges here are finding the right person, retain-ability, and the right choice of technology. Many ventures spend much money to develop stacks in various technologies and eventually reach the one they wanted in the first place. The suitable elemental advisory on the choice of technology requires a higher order of mentoring to capture a business opportunity. Once the technology aspect is sorted, the right mix of founders and team business management abilities, strategy, and execution are necessary since these are equally important pillars.

4) Founders patience is a crucial ingredient in the success or failure of a venture. When the founders make a business model and execution plan, there are assumptions of time needed to validate a product and associated business model. In real life, it can be 2 to 3x longer than expected to validate. Since validation is also dependent on intuition and listening to potential users, it often is not comprehensible in advance. An MVP will require several rounds of customer checkpoints and iterations before they become viable products that people can use and recommend.

5) Most ventures also fail since they select to work on a problem that is not significant enough. In order words, from multiple ideas, founders should find the problem whose solution is really missing by the people who can pay to use it. Selecting a wrong idea due to conviction, haste, or advisory leads to 30-40% innovation failures. Involving clients in solution development, regular testing of the performance, and their willingness to pay is critical for a venture’s success.

6) Dependence on funding instead of relying on savings to reach early revenue can become a “fail fast” decision. Founders seldom look at the runup of initial months/years to be covered by loans from small banks. This can be a predictable amount in time of need instead of spraying and praying with the pitch deck to angel investors. During the initial growth phase, reliance on bootstrapping, money from family members, funds, and part loans from banks may work better for the growth of a venture

Overall, the evidence of successes and failures in the startup’s ecosystem indicates that the founders should surround themselves with mentors and team members with complementary skills, which accelerators and innovation centres can bring about. Further, the founders should launch and iterate fast, with a balance of speed and precision. Lastly, work on a solution that is needed by a significant amount of users and be innovative in generating money for the venture.

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