A rule of thumb in business is that if you understand the needs of your customers, you understand your business. Successful startups understand their customers so well that they are able to assign personas to them
Kathmandu, January 30, 2017:Â The startup world is a place filled with so many pitfalls that on average nine out of ten startups fail. This statistic represents a reality that most entrepreneurs face. To many of those who run a startup, it mostly means diving into the unknown, dealing with ambiguity and constantly facing uphill battles. However, what is intriguing is how the remaining startups survive and succeed. This question has been around for a long time, and many have tried to pin down specific factors that lead to successful startups. Like everything in life, there is no one rule that fits all. The list of factors that contribute to the success of a startup is extensive and ever expanding. Nevertheless, we can see that highly successful startups have some things in common.
The founding entrepreneur is the heart and the driving force behind a company, and is the one whose vision pushes the company to go beyond the norm. A visionary founder can inspire people to believe in his or her idea, and either join the venture or invest in it. Furthermore, a good vision is like a compass for the company–it provides focus and purpose for the team. Consequently, a motivated and focused team is likelier to stick with the company even through the rough times and will work hard to see the vision fulfilled. All the big companies that we know of today like Google, Apple, and Facebook started with one vision, led by their visionary founders. Sergey and Larry of Google wanted to make every data in the world accessible to all, Steve Jobs wanted Apple to make a contribution to the world by making tools for the mind that advance humankind, and Mark Zuckerberg wanted Facebook to be used as a means to connect with family and friends.
Deep understanding of customersÂ
A rule of thumb in business is that if you understand the needs of your customers, you understand your business. Successful startups understand their customers so well that they are able to assign personas to them. They know what they want, where they want it, and how to get it. Having a deep understanding of the customer means that you can create a product to exactly address the problems they have. In some sense, you are delivering painkiller to the customers. The great thing about making a product people want is that they are also willing to pay for it, contributing to the overall financial success of the startup. Perhaps, one of the best examples of understanding customer wants comes from Airbnb, the multi-billion dollar online market place for short-term lodging. The founders saw that there were numerous listings on Craigslist of people looking for affordable short-term lodging. Furthermore, many of these people were coming to conferences and other short-term events in the area. They saw that this need had not yet been fulfilled, and therefore saw an opportunity to provide exactly what the market needed.
Putting assumptions to test
One of the strongest qualities of a successful startup is their ability to let go of their ego and test their assumptions and beliefs. This is not easy for most people, as putting your beliefs under scrutiny means venturing into the unknown and having to deal with negative emotions. However, the faster you test your assumptions and find the things that donâ€™t work, the faster you can move towards creating something that does. This method does wonders for a business as you save time and money by realising what isnâ€™t working early in the business rather than when you have a final product. This way you are also able to build a better product or service for your customers. For instance, if you are creating an app that makes it easy to shop for clothes online, there are numerous assumptions that have convinced you that this is the right idea to work on. These assumptions might be that people are increasing making more purchases online, that clothes shopping can be easily done through an app, or that there is a lack of online portal like yours. If you spend months crafting a beautiful app with amazing features, and then while launching it you find out that people actually prefer buying clothes in person because they can feel the quality of what they are buying. You would have then wasted months of valuable time and effort. Therefore, good startups are smart and treat their assumptions as just assumptions, and not facts. Assumptions should always be verified, the quicker the better.
Masters of timing
One of the major factors that differentiates a successful startup from an unsuccessful one is its timing. It is the knowledge of when to enter the market. Take into account that the right timing is not about luck, but about the knowledge and understanding you have of the market. For instance, would you think of starting the search engine company right now? I would certainly hope not. Even if you wanted to, there would barely be any users because the search engine market is dominated by the likes of Google, Yahoo and Bing. Insights like these give successful startups the ability to masterfully time their entry into the market. However, timing is about not only being the first one to enter the market, but also being able to recognise a gap in the existing market and filling it. For instance, YouTube was not the first video streaming site; it was RealPlayer. Before YouTube, however, the online video market was highly segmented. You needed to download different software to watch videos on different sites. When Adobe Flash launched, it came pre-installed in most browsers. YouTube supported this video software format, and hence was able to draw in many people. The masters of timing are able to understand the movements of the market and dive in when the time is right.
Understanding startup success has been a topic of interest in entrepreneurship for a long time. Even through years of research, it is hard to plan a path that would lead you to startup success. However, few factors stand out among the highly successful startups, and those are the ones worth taking note of.
ByÂ Pranjal Ghimire