Think, just for a moment, about your favorite brand or product. Once upon a time, it was the brainchild of a struggling startup. It may have started out as someone’s “crazy idea” or “pet project.” But now, you use it regularly, perhaps even every day.
So how did it get to you?
After all, it overcame the odds to get to where it is now. Nine out of 10 startups fail. So what did it do to ensure that it was part of the 10 percent that achieved business success?
Most likely it was a combination of the right idea at the right time, backed by the right people, with the right amount of investment. But for many companies – even super successful ones – it’s not always “plain sailing.”
Why Do Startups Fail?
The fact is that most startups fail, and even the most successful businesses have mishaps from time to time. Remember Google Glass? What about New Coke?
No? It probably comes as no surprise, then, that the main reason startups fail is because they make products that no one wants. This accounts for 42 percent of startup collapses, according to CB Insights.
Other key reasons startups fail include running out of cash (29 percent) and not having the right team in place (23 percent).
Successful Entrepreneurs Who Didn’t Give Up
The road to success, however, is rarely straightforward. Just look at the success stories of some of today’s most famous entrepreneurs.
FedEx founder, Fred Smith (whose net worth today tops $5.3 billion), revealed that his college professor labeled his concept for Federal Express “interesting, but not feasible.” And, Walt Disney once got fired from his role as cartoonist at a newspaper because, according to his editor, he “lacked imagination and had no good ideas.”
Steve Jobs was ousted from Apple Computer in 1985. But he soon turned his luck around after founding a new firm, NeXT (which eventually merged with Apple) and acquiring The Graphics Group (now Pixar).
Jobs later revealed that being fired pushed him to do more. He said, “The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.” At the time of his death, Jobs’s net worth was estimated to be $10.2 billion.
Another famous entrepreneur, Elon Musk, narrowly escaped bankruptcy after his electric car firm, Tesla, lost money and his space exploration company, SpaceX, suffered a series of rocket launch failures. He later labeled the year “the worst of my life.” Since then, SpaceX has won billion-dollar contracts from NASA. Musk’s net worth is now estimated to be $19.7 billion.
And, finally, have you ever heard of the Amazon Fire phone? This massive flop was once touted as being crucial to the company’s future. But sales failed to take off, even after Amazon cut its price to just 99 cents! It’s proof that even the biggest companies can still make mistakes.
Eventually, CEO Jeff Bezos wrote off his company’s $170 million phone business, saying, “If you’re going to take bold bets, they’re going to be experiments… Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”
Female Executives, Entrepreneurs and the Struggle to the Top
There is a distinct lack of highly successful female entrepreneurs out there, with only 14 of the 1,011 self-made billionaires in the world being women.
But in recent years, a greater focus on gender equality on boards, as well as the ongoing #metoo campaign, has helped to shine a light on the difficulties facing business women, and how they can be overcome.
Just look at the success stories of people such as Katrina Lake, Adi Tatarko and Anne Wojcicki. Their example, along with a more concerted effort to increase opportunities for women in the workplace, has undoubtedly contributed to the rise in the number of female, self-made billionaires recorded over the last year.
Eight Steps to Business Success
So, what does it take to achieve business success?
How did Amazon go from an online bookseller to the global e-commerce giant it is today? What did Apple do to become the largest tech company in the world? How did Sergey Brin and Larry Page take Google from a two-man, dorm-room operation to the most-visited website in the world?
There are six things that startups can do to increase their chances of business success:
1. Don’t be Afraid to Take That First Step!
If you have a great idea, don’t be afraid to take a chance on it. Do some research, explore its potential, and brainstorm the things you’d need to do to get it off the ground.
As Facebook friend, Scanner Joe, explains, “…getting the courage to get started is the biggest challenge an entrepreneur has. Everything else is not easier though, but the first steps seems to be the longest one.”
2. Have a Perfect Product
Ultimately, people need to like what you do, and want what you produce. This is what will gain you sales, market share, and a loyal customer base.
But, remember, just because you like your idea, it doesn’t mean that others will. You still need to do the groundwork if you want to achieve business success. Get feedback from customers, carry out regular product tests, do market research, and set up focus groups. Most importantly, listen to your customers and use their feedback to change, innovate and perfect your product.
3. Grow, and Grow Fast!
Growth is the only way to get potential investors interested. Being profitable gives you more money to plough back into your product development, manufacturing processes and staff. It also makes you an attractive investment.
But small amounts of growth won’t do: you need to achieve double-digit growth. If this doesn’t happen early on, chances are it will never happen.
4. Be Versatile
Startup teams must be responsive and resilient. When things go wrong, which they can do very quickly, people need to be able to jump in and deal with problems there and then.
It helps if you’re multi-skilled, too. You’ll need to be able to turn your hand to product development, marketing, negotiation, compliance, and strategy.
5. Don’t Get Overloaded
Trying to get a startup off the ground is no easy feat. There’s no doubt that it’s going to monopolize much of your brain power. But, immersing yourself in work completely, will likely lead to fatigue, stress and burnout.
As LinkedIn follower and small business owner of New Noise Audio, Stacey Hollis explains, “…make sure you keep your work/life balance in check. Running your own business can consumer a lot of your time and energy, so making sure you schedule in breaks, exercise and also time with friends and family is just as important. If you don’t have your health and well-being, you won’t have a business at all!”
6. Get a Business Partner
Some of the most powerful companies in the world have co-founders. For example, Google (Sergey Brin and Larry Page), Apple (Steve Wozniak and Steve Jobs), and Microsoft (Bill Gates and Paul Allen).
When you’re at the helm of a budding startup, it can be scary. But, as the old saying goes, “Two heads are better than one.” Having a partner can help to ease the pressure and stress that comes with running a business. He or she may have complementary skills, provide emotional support, and be on hand to help out with the day-to-day. And an alternate perspective may help to broaden your vision and avoid the risk of mistakes being overlooked.
7. Know That Failing is Part of Business Success
Sometimes, it doesn’t matter how much time, energy or money you throw at a product, it still ends up being a “dud.”
Perhaps you launched it at the wrong time (in an economic downturn, for instance), it was too expensive, the marketing campaign was terrible, or customers simply didn’t like it. Unless you can see a different route, or you have the funds to change the product significantly, it’s probably best to quit while you’re ahead.
Product failures can be notoriously expensive and damaging to your brand. Consider Samsung’s Galaxy Note 7, for instance. The phone, which launched in 2016, was lauded for its superior storage, design and usability, and may well have been a hit if it weren’t for the fact that it occasionally caught fire and exploded. It was soon banned outright from flights, and Samsung had no choice but to recall the entire model. The ordeal reportedly cost the company $1 billion, and a further $17 billion in lost sales.
And Samsung is not alone. Google has had a number of “flops” in the past, too. Its virtual world, Google Lively, lasted just six months before being pulled, and its augmented reality eyewear, Google Glass, was withdrawn from the consumer market in 2015.
A failure doesn’t have to spell the end, though! One thing that all great entrepreneurs have in common is that they have failed multiple times – and they bounced back.
Take Sarah Blakely, founder of shapewear brand Spanx. She credits her business success specifically to her failures. “I’d get kicked out of buildings all day long,” she remembered. “People would rip up my business card in my face. It’s a humbling business to be in. But I knew I could sell and I knew I wanted to sell something I had created.” Spanx is now worth just over $1 billion – not bad for a company that Blakely started with just $5,000.
So, if something doesn’t work, try something new. Don’t give up, no matter how down on your luck you feel. As Thomas Edison once said, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”
Do you work in a startup? How do you deal with failure? And, what do you think are the key ingredients to business success?