November 5, 2017
Anyone who’s starting a business has no doubt been informed of this scary statistic: More than half of all startups fail to survive past their fourth year. Unless your goal is to get rich in less than four years and then call it quits, it’s important to develop a plan for defying the odds.
The more your business is able to pick up steam in its early years, the greater chance it will have for long-term success. Those businesses that don’t make it past year five? Odds are good they didn’t have a great year one, two, three, or four. So here’s one way to beat the startup odds: Take steps to build momentum right out of the gate. Here are five key strategies for getting started.
Cater to Your Ideal Customer
In the early stages of a startup, it’s easy to focus so much on developing your product or service and making them as impressive as can be that you lose sight of who the product or service is for. But if you want that product or service to appeal to a large enough audience to sustain a viable business, your ideal customer needs to be at the front of your mind during every decision you make.
Work to understand what problem your product or service will help customers solve, any other reasons why your customers might seek you out, and who your ideal customer is in terms of lifestyle, socioeconomic background, and so on. The more you get clear about the kind of customer you’re trying to cultivate, the more clarity you’ll have around how to allocate R&D and marketing resources. It will also help you understand the value your product or service brings to customers’ lives, which can facilitate realistic price setting. This is why, at my fitness content startup BarBend, we held off on advertising for a long time so we could first learn about our readers and the kind of content they want to see. And it worked.
In addition to targeting the right customers, it’s critical to target them in the right way. Make stellar user experiences and customer service core parts of your company’s mission and values, and you’re much more likely to cultivate a loyal customer base.
Cultivate a Talented Team
When you’re bootstrapping a startup, it can be tempting to hire the people who are willing to work for the least amount of money. But this can amount to suicide for a young company. After all, the people pouring their blood, sweat, and tears into the business will play a huge role in whether or not it survives.
So reach deep into your pockets and pony up for top talent—even if it means building your team more slowly than you would like. Investing in top talent will also serve you if you end up going the VC funding route, because most VCs are unwilling to invest in a company that lacks an impressive management team.
Create a Roadmap
Few businesses succeed without a clear sense of their goals and a roadmap for achieving them. Even in the early stages of your business, when you aren’t sure exactly what to expect from your efforts, it’s important to set realistic goals and create a game plan for how you’ll accomplish them.
Make this plan as specific as possible. Define your Key Performance Indicators (KPIs), identify realistic deadlines, and collect as much data as you can along the way so you’re able to effectively refine your efforts over time. At a minimum, plan to identify milestones for the next 12 to 18 months across several aspects of your business (e.g. customer acquisition, revenue, product features, service improvements, and so on). Make sure your whole team is on board with these priorities so they don’t fall to the back burner.
Get to Know Your Competitors and Your Industry
If you want to be taken seriously in any market, you need to know your stuff. That means developing a solid understanding of your industry so you’re able to establish yourself as an industry expert and so you’re equipped to capitalize on important trends.
Meanwhile, getting to know your competition will serve dual purposes. First, it will further enhance your industry knowledge. Second, it will provide you with a chance to identify opportunities for doing things better. Investigate every aspect of your competitors, from the UI/UX on their website to their customer service practices. Consider why your competitors have made the choices they have and how you might be equipped to do things differently in the pursuit of more satisfied customers.
Focus on Your Strengths
When you’re just starting a company, there are so many decisions to make. It’s easy to get pulled in a million different directions—and the end result is a total lack of brand cohesion or focus. That’s why it’s important to come up with a set of guidelines that will help you make decisions that are truly in your company’s best long-term interests.
One of the best guidelines out there is to always choose to focus on your strengths. If there’s an opportunity to do something but your team isn’t equipped to do it well, maybe don’t do that thing until you have the appropriate resources in place. If your customer service team has proven highly effective at what they do, consider how you might emphasize great customer relationships in your branding. Bottom line? Pay attention to what your team is doing well, and then figure out how to do more of those things in ways that integrate with your company’s roadmap to success.
Read more about startup tips and tricks on TechCo
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