In the hope of becoming the next big thing, over 90% of startups have to taste the bitterness of failure.
Entrepreneurs are always in search of a set of practices that might increase their odds of building a successful startup.
Here, I’m sharing with you 16 of the most amazing and powerful tips that ensure startup success.
1) Do What You Love. Love What You Do!
Aiming just for success never works. You’ve got to do what you love and are truly passionate about.
If you aren’t passionate about what you are doing, chances are that you will give up when things start to get hard.
Just like Jobs said: “People say you have to have a lot of passion for what you’re doing and it’s totally true. And the reason is because it’s so hard that if you don’t, any rational person would give up. It’s really hard.”
2) Choose the Right Target Market
Peter Thiel in his amazing book “Zero to One” sabotaged the myth of idealness of the perfect competition.
He argued that under perfect competition every firm is undifferentiated and sells the same homogeneous products which in the long-run results in no profit for the companies.
According to Thiel, “if you want to create and capture lasting value, don’t build an undifferentiated commodity business”.
In light of the above arguments, it’s safe to say that you should look to enter a market which you can dominate.
3) Put the Right Team in Place
It’s critical for startup success that everyone in your company can work well together.
Defining the role of employees does help in reducing conflicts. It’s good if your employees possess technical abilities and complementary skill sets but it’s of utmost importance that every individual is sharply distinguished by his/her work.
Therefore, it’s critical to make every person on the team responsible for doing just one thing.
4) Choose the Right Brand Name for Your Startup
Your brand must possess the following 3 qualities:
- It must be meaningful: It must communicate the essence of your brand and cultivate a positive emotional connection with the consumers.
- It must be distinctive: It has to be unique and easily memorable.
- It must be accessible: It needs to be interpreted and spelled with ease, e.g. “Zeal For Success“.
5) Start Small, Think Big
Once you are able to dominate a niche market, then you should gradually expand into slightly broader markets. Amazon is a great example of this.
Jeff Bezos vision was to dominate all of online retail, but he started with only books.
Once Amazon was able to dominate the online book retail market, it started expanding to the most similar markets – CD’s, software, and videos and became the world’s largest general store.
6) Take Care of the Legal Matters
It’s essential to take these 4 steps for the legal protection of your startup.
- Protect yourself with a business entity: Operating a business without a business entity in place can put your assets at severe risk. You need to hire a professional and set up a business entity to secure yourself and your business from ruin.
- Protect your business with signed contracts: On the initial stages of your startup, paperwork might seem boring but it can make or break your business. You need to have signed contracts to protect all the involved parties from any legal fights as they could cause you a lot of time and money and also put your businesses and personal reputation at stake.
- Protect your ideas: Before revealing your ideas publicly, it’s essential to have everyone involved sign non-disclosure agreements (NDAs) in order to protect your sensitive information.
- Protect your intellectual property: To a business, nothing is more valuable than intellectual property. It’s of utmost importance that you identify and protect all the intellectual property that you create. It’s critical for the success and viability of your startup.
Legal protection is inevitable for startup success and in many cases, it’s overlooked.
7) Always Be Learning
Committing to the concept of life-long learning is perhaps the most effective way of succeeding as an entrepreneur.
Charles Munger once said of Warren Buffett: “The other big secret [to our success] is that we’re good at lifelong learning. Warren is better in his 70s and 80s, in many ways, that he was when he was younger. If you keep learning all the time, you have a wonderful advantage.”
Elon Musk used to read a book a day. He taught himself rocket science just by reading textbooks.
Bill Gates reads around 50 books a year.
Well, this makes a pretty strong case for the importance and benefits of learning for entrepreneurs. So, Always be learning!
8) Focus on Valuability of Your Product
Value can be defined as: “the difference between the price charged and the benefits the customer perceives they will get.”
If a customer perceives that he will get a lot of benefits for the price he is paying, then his perception of value is very high.
Apple products are a good example of this. Despite charging a hefty price, Apple was able to sell 217.72 million iPhones in 2018 as the customers believed they are getting a lot of value against the price they are paying.
9) It’s Critical to have a Feedback Loop
Feedback can play a critical role in the startup’s success. A customer’s feedback is an insight into what is working well about your product or service and what should be done to make the experience even better.
10) Stay Flexible and Pay Heed to the Market
You can’t be stubborn about imposing your idea upon the consumers. You must listen to what they truly want and will be willing to pay for.
That’s why customer feedback is so important for the product’s success as explained earlier.
11) Consistent Innovation is the Key Ingredient for Startup Success
What happens when businesses stop innovating?
The decline of Hewlett Packard is a great example. In 1990 HP was worth $9 billion. The company innovated consistently during the next decade.
- In 1991, HP released DeskJet 500C
- In 1993, it launched OmniBook
- In 1994, HP released OfficeJet
By mid-2000 HP was worth $135 Billion. But then, HP stopped innovating and inventing things. As of today, HP’s market capitalization has plunged to $24 billion.
This gives us an important lesson that in the modern era of science and technology, we have to innovate consistently in order to stay ahead of the curve. Otherwise, we will suffer the same consequences that HP did. May be even worse!
12) Invest Your Own Money in the Startup
When it comes to getting funding for your startup, there are angel investors, venture capitalists and a few other sources.
Startup founders often utilize two main strategies to acquire funding:
- Debt financing: Taking out loans and paying them back at specific interest rates. You will only retain profits and control if your startup succeeds.
- Equity financing: Selling shares or ownership in your startup. You will owe less money, but your investors or part-owners will split the profit with you.
As a startup owner, you should neither be willing to take big loans nor split your profit with others. It’s best to keep the maximum piece of cake by investing your own money into the startup unless absolutely deemed necessary.
13) A Good Customer Support Service is Essential for Startup Success
Successful businesses tend to provide a high level of customer service which results in higher customer satisfaction.
The benefits a startup can reap by providing a consistently high level of customer service include:
Increased sales – Customers will be more likely to try out other products/services.
Customer loyalty – Customers will be more likely to be a source of repeat business. They will also likely recommend the business to friends and family. It’s rightly said: “A satisfied customer is the best brand ambassador”.
A more efficient and effective workforce – Satisfied customers will help in creating a positive working environment.
14) Never Stop Networking
As an entrepreneur, the benefits of networking are critical to your personal and business growth.
Among the countless benefits of networking, here are a few important ones for startup success:
Knowledge sharing: Networking is awesome for sharing ideas and knowledge. Whether you are looking for feedback or discussing your business point of view, networking will help to expand your knowledge and enable you to see things from a different perspective.
New opportunities: Networking will by default result in some tremendous opportunities. You will never know or be able to analyze how or when they will materialize, but they will. It could be a partnership offer or a request for your product or service. It’s important that as a startup founder/owner you are always ready to grab such an opportunity.
Building Connections: By networking, you not only gain exposure to the people in a room, but you are also building connections with their network. If anybody among your network knows someone that has a need that matches your business, if you have made a good impression, you are likely to win a referral.
Increase your confidence: By regularly networking, and talking to people you don’t know will help in increasing your confidence. Your business growth is often dependent on talking to people and making connections so this will surely help.
(ProTip– You must read “How to win friends and influence people” by Dale Carnegie to become better at communicating with people.)
Networking will help in brand building: Being visible and getting noticed is a big benefit of networking. It helps a startup with brand building.
15) Startup Success is the By-Product of Hard Work
The CEO and Founder of SpaceX and Tesla – Elon Musk is famous for working his buns off.
Elon’s proceeds from Paypal were $180 million. He put $100 million in Tesla and 70 million is SpaceX. As of today, Tesla’s market capitalization is $43.80 billion while SpaceX is valued at approximately $34 billion. Elon works around 100 hours a week.
In Elon’s own words: “Work like hell. I mean you just have to put in 80 to 100 hour weeks every week. This improves the odds of success. If other people are putting in 40-hour workweeks and you’re putting in 100-hour workweeks, then even if you’re doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.”
16) Never Give Up!
Well, you would have likely heard this phrase so many times in life that I didn’t need to write this one, but the post would be incomplete without it. Still, I know that many will overlook it.
So, I would just recommend you to Never Give Up.
If there’s something that helped you in becoming a “startup success”, let us know in the comment section.
I hope you benefitted from this guide.
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Thanks for reading.