#Asia Startup or fail: 5 major factors that can make a big difference between success and failure


There is no mathematically proven formula for startup success, but we can bank on experience, observation, and empirical knowledge

Enumerating the pitfalls of startup success is so much easier than talking about the more important, more sought-after success factors. Well, there is no mathematically proven formula of startup success, so we have to depend on experience, observation, and empirical knowledge to create our own success formulas.

Over the past decade, veteran startup entrepreneurs, angel investors, idea incubators, and industry experts have tried to capture these success factors.

We have put together five of them, right here for you:

1. Idea: The seed that decides how well your startup grows

The idea is not everything; Yet, your startup is nothing without the idea. Your startup idea, the subsequent business model you design, and your business operations are key determiners of startup success. Here are 5 indicators to track:

  • Profitable: The revenues obtainable from the business over the short and long term must be sustainably higher than the known and anticipated costs of delivering products or services (costs of manufacturing, storage, packaging, transportation, product development, etc.)
  • Protectable: Entry in the market should be relatively difficult for competitors. In the least, any attempts of entry should be identifiable, and you should be able to make it difficult for competitors.
  • Sustainable: Apart from generating profit, the model should be able to leave you breathing space to develop new products, innovate, invest in R&D.
  • Flexible: In events of a competitor turning the heat on you, flexibility in your business idea and model help you survive and beat the pressure.
  • Exitable: There are two aspects to it. Firstly, the startup must be able to operate, a few years down the line, to operate without you. Secondly, you should be able to sell it off, or liquidate it, should the need or opportunity arrive.

Most of these ideas have been extensively explored in The Bootstrapper’s Bible: How to Start and Build a Business with a Great Idea and (almost) No Money, authored by Seth Godin. Most renowned startup success mantra books highlight similar elements as indicators of a great startup idea.

2. Team: The brains and hands that walk the talk

You need a great team to execute a good startup idea, and that’s where most superb and novel business ideas fail to transform into successful businesses. Team building, growth, and management of the roster are critical determiners of startup success. Here is a quick look at the kind of decisions and plans you need to take care of, to make your startup dream a reality:

  • Written and signed agreement defining the position and role of the co-founders of the startup
  • A detailed plan highlighting the number and nature of positions to be filled
  • The decision between hiring employees and engaging consultants and contractors
  • Understanding the legal aspects, pros and cons of hiring freelancers
  • Devising a set of rules to govern and manage situations of planned or unplanned exit of key team members
  • On-boarding plan to enable new hires into quickly coming up to speed, and adding value to the startup

3: The Support Ecosystem

For keeping your business above water for those first few critical initial years, as well as for making a name for your startup in a competitive market, you need a strong ecosystem of support. And this is not restricted to financial support; Intellectual and experience capital is equally important.

Financial support: Upfront funding worth thousands (if not millions) of dollars makes it significantly easy for startups to gather eyeballs and footfalls. Lines of credit, personal capital, and loans contribute to the financial support ecosystem of successful and empowered startups.

Intellectual support: It’s not possible for the startup founders to anticipate all challenges their business will face. In such situations (for instance – regulatory and compliance problems, competition from cash-heavy competitors, decisions on price points and product lines), a support system of mentors, market analysts, and industry veterans act as a pacemaker for startups.

Eventually, the support system also includes first round clients, PR experts, and strategic business partners. To make your startup successful, keep a hawk eye on how you can create and strengthen your ecosystem.

4- Timing: A lesser known, yet significant success factor

Heard Bill Gross’ TED talk titled The single biggest reason why startups succeed yet? Bill quantified the five critical determiners of startup success, and concluded that timing is the most significant of them all, accounting for 42 per cent of the difference between success and failure (his study spanned across 100 Idealab and 100 non-Idealab companies; Bill Is the founder of Idealab).

AirBnb and Uber are the perfect successful examples, timing their startups around the post 9/11 US era, when the nation’s low and mid-income group population was looking for ways and means to earn additional incomes to stay afloat. Timing your startup right is about determining how much of an effort it will be to educate the potential market (being early), or to face and beat the existing competition (being late).

5: Motivation and the desire to move

Keep moving – that’s the key to sustainability and staying relevant, and beating the force of time in the journey of your startup. Here are 3 examples of how successful businesses are ‘keeping the dice rolling’.

  • Amazon has recently upped its investments in grocery business, opening checkout free grocery brick and mortar store.
  • Indian digital wallet superpower PayTM recently bagged banking license from the nation’s regulatory body.
  • E-commerce giants regularly invest in startups to hedge their future risks.

Answering the “what’s next” question is what keeps the thought machinery oiled, and that is what gives a forward looking and “speed” outlook to startups, helping them avoid the real dangers of falling in the rut of operations and losing in the race to real success.

Final thoughts

These five success factors will act as distinct, unambiguous, and easily understandable parameters that have a significant role in determining the success of a startup. Align your actions and strategies to these success-factors, and you’ll stand in good stead for the times to come.


The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.

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