Factors Actually Matter The Most For Start-Up Success

The start-up organization is one of the greatest forms to make the world a better place. If you take a group of people with the right equity incentives and organize them in a start-up, you can unlock human potential in a way never before possible. You get them to achieve unbelievable things.

But if the start-up organization is so great, why do so many fail?

Let’s find out what actually matters most for start-up success.

I tried to look across what factors accounted the most for company success and failure. So, When I first noticed these factors then I thought these factors should be in this order.

1. Idea
2. Team
3. Business model
4. Funding
5. Timing

So, I will explain a little bit about these factors.

Idea – People think that idea is everything. You named your company, started a project, created a logo and these all movements are really enjoyable when you first come up with your idea.

The source of the idea is based on consumer need. It’s all about a Need just find a need and fill it. For a new start-up there are two possibility,

First is modify or improve – Take an existing product or service idea and modify or improve those product and service as per your understanding. Or ask yourself, is it there a better way to improve?

Second is Transformational- Come with brand new ideas that have never been done before and so that’s why I called transformational Doing a new thing is always risky as compared to already existing but that should not stop you to do new things.

The key word in both cases is innovation and “necessity is the mother of innovation” and the main point is need of consumer and start looking the picture from different angles try to look what are the problems of customers what are they need try to focus how you solve those problems? In which are you passionate about and create a solution to those problems?

Team – I think that the team, the execution, adaptability, that mattered even more than the idea. But someone told me “Everybody has a plan, until they get punched in the face.” And that’s so true about business as well.

So much about a team’s execution is its ability to adapt to getting punched in the face by the customer. The customer is the true reality. And that’s why I came to think that the team maybe was the most important thing.

Team work creates a smoother and looser structure by developing a friendly environment teamwork encourages flexibility by working and communicating together and teams enable different perspectives to be considered and thus allow the business to respond to change faster.

Enhance problem solving by combining different solutions, abilities and talents into one big productive and allows new ideas to flourish and goals to be achieved faster. Teamwork improves productivity since the performance and knowledge of an individual is limited compared with a group of varied skill sets.

Business model – Then I thought about the business model. Does the company have a very clear path generating customer revenues? That started rising to the highest in my brooding about maybe what mattered most for success.

Business model is a description of how your business runs, a competitive strategy, and explains how you will do better than your rivals. There are several things business model focus onValue it creates, who it serves, what sets it apart, what resources it depends upon, how it delivers value, how it generates revenue and what its major costs are. These are the areas the business model focuses on.

Funding – Getting funds for your start-up is not easy and you can’t get funding for your start-up from anyone who is not even believing your idea. Maybe that’s the most important thing. Click here for more.

Timing- Is the idea way too late, and there’s already too many competitors? Is it the right time to start-up? Is it too early and the world’s not ready for it? Time is your precious resource because right business at the right time chances of your success is very high.

According to changes in customers’ needs it’s very important to execute your idea on the right time. Because if customers do not accept what you serve, it’s really important to do the right business at the right time.

What factors actually accounted the most for success and failure across all start-ups?

The number one thing was timing. Timing accounted for 42 percent of the difference between success and failure.

Team and execution came in second. The ability of a team to execute is based on a number of things. A few of them include team trust, focusing on the right issues and the ability to come up with solutions to problems.

The idea came in the third the differentiability of the idea. The uniqueness of the idea. Now, this isn’t absolutely definitive, it’s not to say that the idea isn’t important, but it is very much surprising that the idea wasn’t the most important thing. Sometimes it mattered more when it was actually timed.

The fourth one is the Business model. Business model makes sense to be that low because you can start out without a business model and add one later if your customers are demanding what you’re creating.

The fifth one is funding. If you’re underfunded at first but you’re gaining traction, especially in today’s age, it’s very easy to get intense funding.

• There are some examples of a wild success like Airbnb that everybody knows about. Well, that company was famously passed on by many smart investors because people thought, “No one’s going to rent out a space in their home to a stranger.” Of course, people proved that wrong. But one of the reasons it succeeded, aside from a good business model, a good idea, great execution, is the timing.
• That company came out right during the height of the recession when people really needed extra money, and that may have helped people overcome their objection to renting out their own home to a stranger.
• Same thing with Uber. Uber came out, incredible company, incredible business model, great execution, too. But the timing was so perfect for their need to get drivers into the system. Drivers were looking for extra money; it was very important.
• We thought the idea was so great, but actually, the timing was probably maybe more important.
• Some of the failures were a company called Z.com, it was an online entertainment company. We raised enough money that the company had a great business model, and even signed incredibly great Hollywood talent to join the company. But broadband penetration was too low in 1999-2000. It was too hard to watch video content online, you had to put codecs in your browser and do all this stuff, and the company eventually went out of business in 2003.
• Just two years later, when the codec problem was solved by Adobe Flash and when broadband penetration crossed 50 percent in America, YouTube was perfectly timed. Great idea, but unbelievable timing. In fact, YouTube didn’t even have a business model when it first started. It wasn’t even certain that that would work out. But that was beautifully timed.

Execution definitely matters a lot. The idea matters a lot. But timing might matter even more. And the best way to really assess timing is to really look at whether consumers are really for what you have to offer them. And to be really honest about it, not be in denial about any results that you see, because if you have something you love, you want to push it forward, but you have to be very honest about that factor on timing.

start-ups can change the world and make the world a better place. I hope some of these insights can maybe help you have a slightly higher success ratio, and thus make something great come to the world that wouldn’t have happened otherwise.