As CEO of an innovation hub, I’m often asked by people what it takes to create a successful start-up.
With more than 1000 start-up founders coming through our education programs, we’ve seen first-hand what it takes to succeed in the start-up world. It involves far more than an initial great idea. Successful start-ups require a carefully executed strategy, forward planning, perseverance and a lot of hard work.
Through our programs, we’ve been able to identify what sets certain companies apart and gives them a competitive edge.
Our recipe for a successful start-up
Teams vs solo founders
We see a huge difference between the success of start-ups with sole founders and those that operate as part of a team. It’s a lot more difficult to operate on your own and having a diverse team on board brings a wider skill set that benefits the entire company. Ideally, you’d have somebody with a strong technical background alongside another team member who can focus on business growth and marketing. Make sure you have a clear understanding of the different roles and responsibilities right from the start and a deep understanding of personal strengths and weaknesses. Investors also favour diversity as part of teams, particularly having women included. Research shows start-ups founded or cofounded by women generate 78 cents for every dollar of funding compared to just 31 cents for men.
Appetite for risk
Everyone has a different appetite for risk but the most successful start-up founders have set the bar pretty high. We’ve seen a number of our program participants quit their full-time jobs to pursue their innovative ideas and literally throw everything they have had at it. We often ask our start-up founders how far they are willing to go for this idea? Would they be prepared to take a pay cut? Are they happy having skin in the game? Would they be comfortable losing their house if that happened? Knowing their appetite for risk up front is really important in establishing that all founders are on the same page.
Problem-focused
We often say that we want start-ups to fall in love with the problem and not the solution because sometimes we see founders so focused on their own product that they forget the issue they’re trying to fix. A successful start-up has a deep understanding of the problem they’re trying to solve but they don’t have such a narrow focus on the solution that they can’t pivot or see potential in something else.
Start-up name
Research shows start-ups with a short name have a 248 per cent increase in growth within the first 12 months compared to those with longer names. Think about something that will be memorable for investors who often hear hundreds of pitches every month. Keep it short, clear and catchy.
Adaptability
The most successful start-up founders we see are those that are willing to adapt and change. Start-ups need to be willing to take on board feedback and make changes to their product based on that. Make sure you’re capable of shifting to be the best solution possible.
Resilience
We often talk about the highs and lows of the start-up ride and those who are most successful are prepared to get on board for the full ride of the rollercoaster. Have a team which is resilient and prepared for knockbacks along the way. It’s not uncommon to receive 50 rejections from investors and for some people, it can be hard to bounce back from that. Start-up founders who remain laser-focused on their end goal and have the grit to stick it out have a far better chance of succeeding.
