25 Jan, 2018

Startup Business Help

 

Aspiring entrepreneurs should always seek help when starting their first business. Having the right advisors is sure a safer approach. But one of the most important things they can actually do is to help themselves through being informed. Knowing what factors influence the most a business’s rise, success and downfall can make a bigger difference than one might think.

Nowadays, starting on this path with an open mind and good intentions may not be quite enough. Taking into consideration the constant way in which industries change, entrepreneurs should always try to be one step ahead and anticipate major changes and how these would influence their companies’ trajectories.

 

But what factors do actually matter the most for startups to succeed?

 

The business idea

A startup organization could be an excellent way to make the world a better place by bringing something unique to the plate. But if the startup organization is so great, why do so many of them fail? An important lesson is definitely asking the right questions and the right time.

Maybe if we took a closer look at some elements that we automatically perceive in a certain way, we could see a clearer picture. It might be that looking beyond the cover might even save our business or bring more unexpected success.

The first element that we need to inspect is the idea itself. Although we might think that the idea is everything, maybe the team, the execution and the adaptability mean even more for the development of the company and its success. Mike Tyson once said "Everybody has a plan, until they get punched in the mouth.” That also perfectly applies when it comes to doing business. The team is actually one of the most fundamental things on the way of expansion.

 

 

Does the startup have a clear and specific path generating customer revenues?

 

This is where the business model comes in. How much does it actually matter when it comes to a company’s success? But what about funding and timing, what amount of influence do these have on the business’s future?

Invited to have a speech during the TEDTalks show, business man Bill Gross – founder of Citysearch, CarsDirect, GoTo, NetZero, Tickets.com, and more others – talked about how he decided to analyze “what factors actually accounted the most for success and failure across all of these companies.” After founding lots of startups and incubating many others he started gathering data from hundreds of companies out there. The outcome totally stunned him.

Let’s take timing for example. When any entrepreneur takes into consideration a business idea he needs to ask himself if the timing is right. Is it too early for the market? Or is it already too late because of too many strong competitors being out there?

After looking at highly successful companies and others that failed miserably, Bill Gross found that timing accounted for 42 percent of the difference between success and failure. On the second place came team and execution, while the idea was unexpectedly the third factor.

The business model and funding were the last of the five factors. It makes sense because most businesses that become successful can add and adapt their business model to the customers’ demands. And when it comes to funding, it has never been easier to find serious investors in this digital world in which information gets out there in a matter of minutes. Today, companies can probably get from zero to hero quicker than even before.

 

Timing

Let’s take a look at a certain example of a business that got the timing spot on. When Uber first started out it didn’t only have an excellent business model and proper execution, but it also benefited from the most ideal timing.

In his speech, Bill also gave an example of one of the companies that he founded that failed terribly because of lack of timing. The company’s name was Z.com and it focused on online entertainment. Besides a strong business model, a lot of funds, they even gathered an incredible team to work with on the project. But because the business was started right at the beginning of the 21^st century it was doomed to failure. Back then the internet was so slow that people couldn’t actually enjoy the company’s idea. In conclusion, timing couldn’t have been worse for Z.com.

But only 2 years after their company failed, more specifically in 2005, the issue was simply solved by Adobe Flash. That’s when YouTube started out without even having a business model. However, it was a terrific business idea that was put into practice at the most ideal moment. In November 2006 Google bought it for US$1.65 billion, YouTube now operating as one of its subsidiaries.

 

So of course, the idea is essential, execution as well, but most probably timing is the most important. Even though an idea has tremendous potential, being very strict, analyzing every aspect of timing and thoroughly investigating the market might be the most fundamental for success.

 

So what’s next after our startup runs smoothly? Of course questions like "How can I make sure that our company make the necessary changes before we’re hit by a crisis?" or “How can we constantly reinvent our company when the market requires it?”

Business strategist, Knut Haanaes found “a balance between perfecting what we already know and exploring totally new ideas -- and lays out how to avoid two major strategy traps.” One of them, he says, is the perpetual trap. Knut explains this as being the moment when we discover something but we lack “the patience or the persistence to get at it and make it work” and instead we create something new.

The second trap that he mentions is “the success trap”. Bill Gates once said: “Success is a lousy teacher. It seduces us into thinking we cannot fail.” Knut ultimately tells us that success proves to be a bigger challenge than we’d ever consider it to be.

Perhaps finding a balance between being confident about our power and also being skeptical of success can lead us in a great manner when it comes to the future of our businesses.

 

 

Startups can be a great way to impact the world and even change it forever. The whole idea is to accept that there’s always going to be more to know and more to work on even after we think that our business has crossed all barriers.