5 Questions to Gauge Your Startup's Potential

Make sure your pride-and-joy--your startup--has what it takes to survive.

Despite the obstacles of a prolonged down economy and a culture seemingly dominated by huge multinational corporations, startups driven by modern efficiency and an entrepreneurial spirit continue to accomplish unexpected, exciting, and innovative feats.

Will yours be one of them? Ask yourself the following questions to find out.

Have You Chosen the Right Location?

Silicon Valley is still one of the best places in the country for startups. This kin of entrepreneurial ecosystems (and others in places like New York and Boston) provide access to venture capital and local investors, and proximity to deep pools of prospective talent. However, startups compelled to stray from the beaten path are finding a growing number of up-and-coming alternative locations developing across the country.

What many new startups are looking for in 2014 is the best of both worlds: a location that replicates the rich culture, networking opportunities, and structured support of Silicon Valley, with affordability that gives businesses the breathing room they need to get off the ground. The decision comes down to what your venture requires most to succeed.

Are You Lean Enough?

Back in 2008, Eric Ries published his thoughts on the importance of having a "lean startup," setting in motion a movement that continues to revolutionize the way the world does business. The general idea was to increase capital efficiency by using free and open-source software platforms, reduce waste through the development of creative and agile methodologies, and cut time in producing sustainable revenue streams through "ferocious customer-centric rapid iteration."

In the past few years, the philosophy has become a driving factor behind many flourishing startups, providing a promising path for entrepreneurs willing to chase innovation while minimizing financial risk. It is important for any new business venture to be familiar with the lean startup methodology and its ongoing evolution, not so much for a definitive blueprint, but for ways to maximize productivity, accelerate product and market development, and allow you to pounce on opportunity quickly.

Have You Built a Powerful Social Media Network?

Nearly one in four people worldwide use social media. On the personal and professional level, social media provides an avenue to build diverse connections through networking, marketing content, and simply taking part in the conversation. This helps you identify talented collaborators, access the insight and support of industry voices, and capture the attention of potential consumers and investors.

Social media sites provide the ability to not only gain valuable face time with your audience, but to also collect data and learn from potential consumers through engagement and interaction. By laying a strong and diverse foundation of social media, startups put in place a system for successful media outreach and intuitive consumer relationship management. It helps open up opportunities for sustainable revenue streams and investor capital, both of which are essential to building out an organization.

Do You Have Collaboration Capabilities?

Some organizations have begun to pull back on the concept of teleworking and telecommuting, wrestling with whether what is lost in face-to-face human interaction is greater than what is gained in flexibility. Yahoo abruptly ended its work from home policy stating in an employee memo, "We need to be one…and that starts with being physically together." The ability to work with partners, consultants, and clients from remote locations is a development that not only enables a growing number of startups to succeed, but presents hurdles that need to be overcome.

In order for startups to keep pace they must discover cost-effective tools specific to their needs--whether they're whiteboarding and brainstorming, building visual presentations, networking internally, or coordinating sales and customer relationships--and weave them into a culture geared toward genuine human interaction.

Can Your Concept Change the World?

It takes a special blend of commitment, will, and passion to fight through the obstacles to turn your vision into a reality. From this perspective, the growing influence of social enterprise on startup culture makes perfect sense.

While the concept of social entrepreneurship is a natural fit with the lean and agile business philosophy, a focused mission that serves as an operational compass and helps clearly express goals to potential investors is also essential. The recent SEC approval of laws on crowdfunding for startups, for instance, opens new doors for entrepreneurs, especially those ready and able to make a compelling case to the small investor.

Millions of new businesses are poised to launch in 2014 and thousands of them are going to be profitable--and perhaps even join the growing ranks of billion-dollar startups in the world. By asking the right questions in the process of self-analysis, new startups can ensure they are in the right place, have the right tools, and are on the right track to achieve success.

-- Andrew Schrage is co-owner of the MoneyCrashers.com Personal Finance website. The site strives to educate readers on a wide variety of topics, including how to budget for retirement, tips to increase your income, and the best small business credit cards. Schrage hopes to make a meaningful difference in people's lives as they work to gain and maintain financial freedom.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

[Image: Wikipedia]

Add New Comment

0 Comments