What a startup needs to succeed

What a startup needs to succeed

Start-ups, features and differences

Startups can be defined as a "new business" that is generally technology-based and has significant growth potential. A start-up business starts with a small team of knowledgeable, professional and highly creative people, and virtually all business activities have to be done by the same small team. Obviously, there are no clear work instructions and specific job descriptions, such as what we encounter in large organizations, and the various managerial, financial, and even marketing and sales tasks are all done by team members.

The work environment of these companies is full of uncertainties and numerous risks. This is especially evident in high-tech startups, which make the gap between startup failure and success less clear and predetermined. In addition, creativity and innovation is a vital keyword in startups, and given the serious weaknesses in financial resources and facilities, the most important weapon and competitive advantage of start-ups in competition with large technology companies is their creativity and innovation.

Key success factors for startups

But do all startups succeed? If we want to answer in one word, we must say "no". Of course, this question needs further explanation. Statistics show that more than 90% of startups fail to commercialize their idea, and only 10% of start-ups can enter the market successfully. At first glance, this statistic presents a very scary prospect of startup activities for entrepreneurs. Should you give the startup entrepreneurship gift to its rivals?

It may be better to look more closely at the reason for the failure of startups. Understanding why a startup fails will help us enter this tortuous path with greater knowledge and confidence. Let's start with a hypothetical example.

1. Idea :

The starting point of entrepreneurship is to create a new and unique idea that can lead to starting a business based on a new product or service. You are a creative person with a lot of new ideas (from your own point of view, of course!). Is everything ready for your success? Obviously, the answer will be no. First, your idea needs further consideration. Maybe this idea is not as new and creative as you think, and there is a similar and even better example on the market. In this case, this is the end point of your work.Of course, just because you have a similar idea does not mean you are not involved. In this case, we can point out the differences and advantages of your creative idea compared to the examples on the market, which can guarantee your success. But in any case, there must be creative features so that the customer is satisfied with your choice compared to others.

Now suppose your idea is innovative enough. Again, one can not be sure that this idea will succeed. This discusses market demand and customer expectations. An idea, no matter how creative and technically sound it may be, fails in commercialization if it fails to meet the overt or covert need of society. So in the second step, try to answer the question of what your idea needs. In addition, you need to pay attention to customer demands. It is the customer who must accept your product and pay for it. So try to change and adapt the features of the product or service based on the wishes of the target customers.

So far, one of the most important and primary factors in the success of a startup has been identified. You need a new and completely different idea that can meet a need or a problem and at the same time match the characteristics of the target market. This idea is based on advanced technology and improves one of the key items of the product (price, performance, time, etc.). Of course, some very new products or services (such as mobile when launching first or the Internet) cover a potential need that did not exist before, and this is why it is welcomed by customers.

It should be noted that many experts consider technology to be an important prerequisite for the success of startups. Technology refers to the set of knowledge, process and method of doing something that you want to use to offer a completely new product or a product with different and improved features compared to existing products. Certainly a technology-based business has a higher chance of success. In this article, technology is considered as a concept hidden in the idea that can guarantee the technical and functional potentials of the final product or service.

2. Motivation and passion :

Suppose you have a technological idea in mind. This idea responds to a basic need or problem in the community and meets the needs of customers. But these are not enough. You must have heard about entrepreneurs and their characteristics. Hardworking and motivated people to start a new business who do not give up in the face of adversity and whose success is the result of many failures. To succeed, you need the personality traits of a bold entrepreneur.

Many people think that entrepreneurs are born with unique characteristics and that entrepreneurship cannot be developed as a capability. However, studies show that entrepreneurship is an acquired skill that can be nurtured and developed through experience and education. In other words, anyone can apply their knowledge and skills to turn a specific idea, or an innovative idea, into a profitable business in a step-by-step process. But before you learn these skills, try to define your task with a key issue: “You can be an entrepreneur; "But for a particular idea or as a style throughout life."

"Success" is one of the most important characteristics of an entrepreneur. Entrepreneurs have a strong inner desire to achieve set goals. Many people aspire to succeed, but do nothing to achieve them, while entrepreneurs strive to achieve their goals by focusing on goals and the desire to achieve results. The "spirit of independence" is another characteristic of entrepreneurs. Many entrepreneurs hate working for others (employees) and therefore prefer to work for themselves. They are their own boss and accept the consequences of this approach. "Risk-taking" should also be added to the list of personality traits of entrepreneurs. Entrepreneurs are people who make decisions in situations of uncertainty and therefore need to accept some degree of risk-taking. Also, the entrepreneur has "perseverance" and tries to meet his aspirations and desires to achieve lofty goals with a kind of "positivity".

Entrepreneurship means feeling excited, independent, creative as well as anxious, insecure and worried. An important and key point to consider is the entrepreneurial perspective and its role in one's life. You can be a cross-sectional entrepreneur for a specific idea, or you can apply an entrepreneurial approach throughout your career. Remember that the entrepreneurial process is hard and tedious, and there may come times when you doubt your ability to sell a product and find new customers. These should not stop you from continuing. Entrepreneurship is like a tortuous path that requires serious determination, enthusiasm and motivation.

3. Team building :

MIT research into the causes of startup success shows that startups that started with more than one founder are more likely to succeed. This shows the importance of team building and a culture of collaboration in start-ups. This spirit of partnership and collaboration must be institutionalized throughout the startup, including the founding team, the management team, and even key product engineering personnel.

Many articles and educational texts related to startup entrepreneurship emphasize the concept of team building and teamwork. The question arises, despite all the emphasis, why do so many startups disagree after such a short time? In particular, the differences between the founders, which can call into question the company's philosophy of existence. The answer is that team building, despite its relatively simple concept, is very difficult in practice, and implementing a team-based structure can have many complexities.

It is very difficult for an entrepreneur whose idea and startup is his whole life to add people like himself. This can be considered the main challenge of team building in startups. A startup founder considers his idea and company as a dear and superior child and will not accept any offer to change it. Their high work ethic often causes them to refuse to hire and add new people to the team. Obviously, cooperation and participation in such an approach has no place. Of course, with the arrival of obstacles and complexities along the way, the need for other people will be felt and work teams will be formed by force. One difference between successful and failed startups is the same voluntary or forced approach to team development and the spread of a participatory culture.

4. Financing :

One of the key factors in the success of any business is access to sufficient capital for the initial costs of starting a business and managing affairs, before the final product launch and achieving profitability. When it comes to raising money to start a business, most people think of banks and getting a loan. In traditional businesses, the relevant risks and risks are usually borne by the owner of the idea or its founder, and the initial capital is provided by him and in the absence of sufficient personal financial resources, through loans. Banks have only a preliminary assessment and formality of the feasibility and profitability of the business idea, and by obtaining sufficient guarantees, they will practically have nothing to do with its final fate. This factor has caused many entrepreneurs and economic actors, for various reasons, such as the inability to provide the required guarantees and the administrative bureaucracy governing the loan process, to not use this method to raise capital.

Although the desire to succeed, the right idea, planning, efficient team building and, of course, cost savings are among the main requirements of startups, financing has a special place. This, especially with the significant costs of the R&D process and the risk of failure in commercialization, causes the founders and startup teams to think about raising the necessary capital from the very beginning of the company. In this way, the concern about the disclosure of ideas and intellectual property causes the acceptance of investment, except in emergencies, to be somewhat diminished. As a startup entrepreneur, you should know that although in the early stages of starting a company and developing technology, you can rely on family and personal capital to meet your financial needs, but this process cannot continue until the end of the commercialization process. Start-ups, on the other hand, take a lot of risks and a very large percentage of them fail to commercialize their ideas, which leads to a lack of investor confidence in funding startups.

Risk, return, investment rate and investment time horizon are the four main and determining factors for investing decisions, and you, as an innovator with an idea, should have clear and reasoned answers to these factors in your presentations to investors.

Another point is to try to use the method that suits the conditions of your business to attract capital. For example, if you are in the process of cultivating an idea, you can not expect VC venture funds to welcome you. Financing through people around you, and in some cases business angels, is a better way to get results.

5. Develop and modify ideas :

In the previous lines, it was mentioned that the idea is one of the key success factors in startups. Innovation and uniqueness, technical feasibility and effort to meet an important need are some of the things that make the idea realistic and have the potential for commercialization. But are successful and commercialized ideas used in the same way as before? Experience shows that the final product or service is often accompanied by many small and large changes compared to the original idea. The process of developing an idea refers to this point. But what changes the idea?

Leaving aside issues such as technical changes and improvements related to the product manufacturing process, one of the most important factors influencing the initial idea is customer feedback. This can be considered the secret of the success of famous startups. From the outset, they capture customer feedback using a prototype or prototype and try to meet a larger share of target customer expectations and demands. This may lead to a fundamental change in the original idea. Prejudice to the first idea and insisting on its completeness, causes that after a lot of effort and considerable expenses, a product is launched to the market that, despite being excellent from the startup's point of view, is not welcomed by customers in disbelief.

Continuous refinement of ideas and development of technology based on the tastes and expectations of customers is the philosophy of pure startups, and today it can be said that this concept has become a key principle of success in the entrepreneurial ecosystem and startups.

6. Timely supply of the product :

One of the most important features of innovation is the need to supply it to the market in a timely manner. This has become even more important with the dramatic reduction in the lifespan of technologies and the rapid replacement of technological products. Early commercialization and being a leader in innovation can bring many benefits, including product monopoly, unlimited pricing, as well as ancillary revenues from licensing technology. It should be noted, however, that the risk of imitating technology increases dramatically with the introduction of innovation for the first time. This will be further explored in the section on the protection of intellectual property.

7. Strategic management of intellectual property :

Every successful business (especially if it works in the field of technology and innovation) needs a comprehensive and strategic intellectual property strategy. Technology startups need to take steps to protect their technological innovations and achievements, which requires the widespread use of tools such as patents and trademarks to protect intellectual property rights. Failure to pay attention to this issue can lead to business failure in commercialization of technology.

8. Marketing, distribution and after-sales service :

Another thing to keep in mind when it comes to commercializing innovation is paying close attention to the concepts of marketing, distribution network, and after-sales service. Using new marketing methods and taking advantage of the potential of online space and social networks, the startup can get to know others (potential customers, investors, suppliers and even competitors) well and facilitate the commercialization path. In addition, offering a unique product with optimal performance attracts market attention. But if it is not possible to provide timely and continuous after-sales service, the above product will be out of the cycle of high-demand products after a while. This is especially important for startups that have limited resources.

Here is a key question. Early delivery of the product and enjoying the benefits of being a market leader may be counterproductive to preparing all the conditions for after-sales service. What to do in this situation? Is the supply of the product a priority or the preparation of the sales infrastructure? This question is a bit difficult to answer, and business owners need to balance the benefits of being first and the disadvantages of poor after-sales service. In any case, thinking about these issues before making a decision is one of the hallmarks of successful startups.

SaaS startup

Today, different types of companies are entering the cloud world, and SaaS products and services have become very popular. According to Gartner, the SaaS industry will become a $ 7.143 billion industry by 2022 due to its scalability and availability. Here are 10 great ideas for launching a SaaS startup in 2021.

Undoubtedly, changes have been forced due to the global pandemic for businesses and have led companies to work remotely, so the demand for this service has now increased significantly.

We have a guide for you to help you get started in the fastest possible time.

Posted by inGenium Ltd

inGenium Ltd

iNGENIUM Ltd. is an software development company from EU which delivers a full range of custom .NET, web and mobile solutions for different business to meet partner's demand.

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