Starting a business is uniquely challenging. And even though two-thirds of Americans dream of beginning a business, relatively few actually will. What’s more, many that do will fail.
That reality naturally produces a fear of failure that can cloud our thinking in the early days of a startup, causing many entrepreneurs to focus too narrowly on immediate success. In some ways this is because starting a business requires a level of grit that is inherently shortsighted. However, most major corporations and all successful small- and medium-size businesses launched as a startup. One differentiating feature is the ability to make decisions in the beginning that prepare them for long-term success.
To put it simply, successful companies have a plan for when they become successful, which allows them to navigate early-stage development with an eye on sustainable growth.
Three things need to be on every entrepreneur’s mind when getting started.
Startups are founded around extraordinary ideas, but they prosper when the right people are in place. Interestingly, while every startup wants to have an incredible staff, many miss the mark when actually hiring people.
To keep costs low and to keep flexibility high, startups often hire green talent with little experience or expertise. This might work early on, but by most measures, they get what they pay for.
Of course, startups are future-focused and they don’t have unlimited budgets, increasing the importance of making the right hiring decisions. To build a company that can be successful today, tomorrow and well into the future, some elements are more critical than others. For instance, when hiring new talent:
When acquiring the best talent, ensure that they exemplify these traits that will contribute to the success of your business. In doing so, your company will be well positioned for both the short-term and long-term challenges that ultimately define successful companies.
Every company needs a dynamic marketing plan and a motivated sales team. The trick is knowing when and how to deploy these resources.
For many companies, building a minimum viable product is all they need to release their sales force to begin their quest to acquire new customers. The results are often short-lived, though. By selling customers on a promise that the product cannot fulfill, many startups see increased customer churn shortly thereafter, decreasing their ability to establish long-term success.
If your product development isn’t far enough along, then your value proposition isn’t sustainable.
The solution is simple. Focus on product development before emphasizing marketing and sales initiatives. If a startup delivers on its promise to the market, it will create long-lasting customers while establishing a positive reputation. Delivering on what you say you will deliver is key to a healthy customer base and accelerating growth.
Undoubtedly, most startups begin with the intention of making money. To ensure that your company is competitive in the long-term, properly sequence marketing and sales, placing them behind product development in your company’s roadmap.
Frequently, rapid growth of a customer base becomes akin to “the dog catching the car.” Despite their clear-minded intention to build a product or service that would be well received by customers, many companies are caught flat-footed when they actually acquire the attention they have been seeking
In other words, they are unprepared for the demands of a customer success cycle that is crucial to the growth and success of their business.
Consequently, most startups require a customer success plan sooner than they think, so develop a blueprint of customer success from day one. This directive will look different for all companies, but, in general, customers want the same things. These include:
This is certainly not an exhaustive list, and startups are continually finding new and exciting ways to engage their customers. By doing this intentionally and from the very beginning, you can create a strong customer base that is loyal, expands their contracts, and serves as brand ambassadors for your business.
Many entrepreneurs wrongly equate immediate, astronomical financial success as the only metric that matters when valuing a startup. Not only is this misguided, but it’s also frequently unattainable.
Instead startups should strive to establish and maintain consistent growth that is both sufficient for now and is hurtling toward a burgeoning future tomorrow.
For many new companies, each rung up the ladder of success comes with a loss. They lose momentum because they did not adequately plan for the next step in their evolution. However, focusing on talent, marketing and customer success today can help any startup gain traction while also being ready to meet the challenges of tomorrow’s success. It’s a matter of approach, but, more than that, it requires disciplined planning and that’s something any entrepreneur can control.
By Mark Flickinger (MBA ’11), COO of BIP Capital