August 24, 2015
Despite the popularity of startup culture and the seemingly endless number of new tech businesses popping up, research shows the large majority of new startups ultimately end in failure. Whether the struggles of tech startups are the result of poor planning, insufficient capital, talent shortages, or something else, the fact remains: Today’s startup environment can be difficult to navigate.
However, this doesn’t mean young entrepreneurs trying to break into the tech sector can’t achieve success; it just means they need to try that much harder to set themselves apart from their peers.
These four successful tech startups each focused on a different aspect of success to distinguish themselves from others and escape the startup quagmire:
1. AppNexus: Cherish Your Team
A happy, committed workforce leads to prosperity. AppNexus’ 25-person recruiting team has grown the company to almost 1,000 employees, and it boasts an 82 percent job offer acceptance rate. How has the company generated such mass interest from top talent?
AppNexus invests heavily in its people, both financially and culturally. Management at the thriving company embraces some key ideas they believe made the difference when starting out:
- People create the technology and the process. Bringing on (and keeping) the best people drives everything else.
- High turnover is not only expensive, but it also damages a company’s culture.
- Specificity is king in the hiring process. Business leaders should be clear about their needs and should focus on acquiring people with skills and experiences that complement their teams.
- Computer screens aren’t good enough. Managers should be physically present, engaging, and interacting with their teams to breed confidence and unity.
- Secrecy helps no one. Making clear decisions and keeping everyone in the loop encourages employees to believe in the company’s vision.
Without a good team, nothing is possible. Some great workers don’t fit the startup mold, and that’s OK. Tirelessly seeking the best talent helps establish a great team, and it’s much easier to expand an already strong group than it is to turn around a dysfunctional one.
2. Deliveroo: Create Your Niche
As tech markets continue to expand, the worst thing a startup can do is crowd a niche that’s already been filled. Smart entrepreneurs need to go after a big market, carve out a slice, and invest where competitors haven’t yet.
Deliveroo succeeded by creating its own niche through investing in features that were important to customers before competitors thought to do so. The startup expanded its range of restaurants — including places that don’t typically offer carryout — and also provided accurate delivery times and driving trackers.
Picking an established market and trying to squeeze past existing competition is a recipe for disaster. Finding a large market with foreseeable growth is a must-have for startup success.
3. Slack: Build Something Simple But Accessible
Slack’s success has debunked the idea that it’s never a good plan to build a better mousetrap. While instant messengers have been around for decades, they weren’t widely used by the business world — that is, until Slack came along.
Slack, which my company uses, is essential to our company communication. Our communication is faster using Slack, and we aren’t bogged down by emails.
In the two years Slack has been around, the company has grown by leaps and bounds. And it’s not just because of its eye-catching design — it’s because the product has purpose, it has every feature your team could want, and it’s incredibly intuitive to use. Slack keeps the communication going with a great app for almost every platform.
4. Influence Mobile: Secure the Financing
Influence Mobile had good margins and steady growth but found itself constantly strained for cash. At just two years old, the company didn’t have the credit it needed to keep investing in user acquisition to fuel its growth. The company decided to standardize its cash flow, receiving earnings weekly rather than monthly. Thanks to the company’s financial savvy to get faster payments, it’s currently seeing more than a 60 percent monthly growth rate — and no, that’s not a typo.
As well-known venture capitalist Fred Wilson said, the primary duty of the CEO of a tech startup is to make sure he or she has enough cash. Without capital on hand, companies can’t invest, hire, grow, research, or do any of the things that help them succeed.
No entrepreneur wants to watch a young, promising company crash and burn when it had the potential to succeed. These four companies earned their success by building the right team, breaking into an untapped market, providing innovative products and services, and locking down the money to pay for it all. Entrepreneurs hoping to do the same would be wise to follow their example.
Image Credit: Flickr/yosuke muroya
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