In a long-awaited follow up to an earlier post, entitled, "10 Common Mistakes That Startup and Small Companies Make," here are 10 suggestions to improve the chances of your startup's success:
1. Test your ideas constantly and be hyper-critical about why you might be wrong—many young entrepreneurs will prepare the requisite SWOT slide for investors, but don't really do the analysis. Validate your ideas with people who will really buy your product/service. If you can't get them to work with you early on, your idea is probably not that compelling ... or they "don't get it." Either way, you have got your work cut out and it's better to know early on.
2. Keep an eye on the market — If you had a good idea, it is reasonable to assume someone else out there also thought of it as well. Ignoring the competition is a big mistake.
3. Keep an eye on the finances—you will need more money than you think. Much has been written about this, but it can't be overemphasized. And be careful with equity. It's easy to give out equity early on to save cash, but if you are successful, this becomes extremely expensive later on.
4. Hire the right people—particularly, people who complement (not duplicate) your skills, and fit your culture. Don't be afraid to hire people who know more than you, as long there is a good cultural fit. Outsource to buy expertise you can't afford in-house, and to perform non-strategic business functions.
5. Stay focused on value, not fluff—ignore the urge to have a "strategy" for every facet of the business up front. Stay laser-focused on providing value for customers. Follow your business plan to make money. You will be a totally different organization once you have proven your ability to generate cash.
6. Remember, there are many reasons why a product/service is successful. It may not be the most technologically-advanced product/service on the market; often it is the one that is marketed or sold most successfully. Therefore, it is important to know what you are particularly good at, and then truly excel at it.
7. Encourage a collaborative environment. There is no monopoly on good ideas. That doesn't mean that decision-making is democratic, but it does mean you encourage people to offer ideas. We give way too much credence to the odd startup with an eccentric entrepreneur who rules the company by strength of their personality. Also, credit people for their contributions.
8. Don't be afraid to be different. Investors are conservative by nature and will probably want you to follow the path of comparable companies. If you have a good reason for doing certain things differently, make sure you can articulate your reasoning , and then 'go for it.'
9. Life doesn't have to end when you create a startup. I have worked in several startups where people stay late into the night, but they almost always waste a lot of time during the day. A culture of 'those who leave early' are losers, is in my opinion, a poor work culture. People need to be passionate and diligent about their work, but you should encourage people to have a life as well. When people feel that they are respected, they work better and care more. It is not a zero-sum game, after all.
10. Believe in yourselves—if you are following some recipe that you found in some 'how-to' book, you are probably on the wrong path. If you truly believe in what you are doing, and you have done your homework, you stand a much better chance of succeeding. There will be no shortages of 'nay-sayers' along the way who will tell you why your idea has already been tried and failed.
Disclaimer: As the veteran of seven startup companies (two that were successfully sold), these are some ideas that can produce outstanding results. If you have some additional ideas, feel free to comment.