Print   RSS

Reasons Why Startups Succeed

Sophie Jones

July 11, 2014

The amazing success stories of entrepreneurs who get their dream companies up and running in no time are circulating around the web, but in today's shaky economy, prospective startup CEOs must wage their decisions carefully. Truth be told, about seven out of ten startups survive the first two years and only five of them will make it through five years of operation. There are, however, some key characteristics that can substantially help in launching a thriving startup –  here's a selection of things that can lead startups to success.

The Leadership

CEO's vision is crucial to the life of their business – it sets the tone for its development and inspires the team to work harder to reach specific goals in the sector. A good CEO must be able to situate the service, skill or product he offers in the market – a great idea alone will not lead a startup to a rapid success.

Clearly, entrepreneurs who already have some experience have a higher chance at succeeding – a study conducted at Harvard Business School pointed out that first time entrepreneurs have only 18% chance of making their venture a victory, while experienced CEOs have as much as 30%.

CEOs should be good at networking too – knowing powerful people in many places can help in securing important partnerships or lucrative investments. Startup leaders need to know how to raise capital for their venture – cash flow is key to keeping the business operations going. Startups can benefit from platforms like RockThePost, where they can quickly raise funds from accredited investors, without wasting their precious time on investor meetings and presentations.

Finally, a good CEO must be able to take risks. They say that great risks are tied to successful companies. Great entrepreneurs should be able to balance the risks – their insight will guide them to either back off or proceed.

The Team

The team of a young startup will have their lives turned upside down – with limited paychecks and crazy working hours, the team should always be reassured by their leader that all these efforts will result in a success. CEOs need to inspire and motivate their teams to endure the many challenges and difficulties of the current economy.

At the beginning of its operation, startup workers have meagre resources at their hands and should be able to use them in the most productive way. Team productivity is essential in achieving as much as possible within a limited time frame – great teams use time and money to get things done quickly and efficiently. Doing more with less should be the guiding maxim of any budding startup.

Startup Organization

Successful startups are usually able to get things done faster than their competitors. Using their time productively and never delaying their activities, startups might stand a chance at succeeding. In this case, mistakes can be quickly corrected and replaced with different solutions.

Young startups operate on limited resources and so must avoid any unnecessary expenses. Every area should have a separate budget with short-term goals to grant CEOs an insight into the company's immediate needs.

Finally, startups must be flexible – adapting to new technologies and cultural trends is crucial to keep up with the demands of the market. Nobody will have a ready solution for a perfect product or service – startups should be prepared to iterate their offer over the years to arrive at a version that works best in the current technological and economic paradigm.

 Feedback   Submit Article