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Success is THE objective of any Start-up in the world whatever the business they decided to be in. Very few of them will become a Unicorn, some will be acquired by a big group, some will struggle to survive surviving for a while and many of them will finally collapse. For more than 10 years, all statistics published in USA or in Europe about failures rate seem to converge to the same picture: 10% failing in the 1st year, 25% failing in 2 years, 50% failing in 5 years. Thousands of analyses have been done about the reason of failures. It is good to know what we should not do as an entrepreneur; it is better to know what must be done to succeed.
The main characteristic of start-up management is that time is short. The competition unfortunately is working hard, money is limited, business window is narrow, then decisions mut be taken as fast as possible and mostly based on trends, experiences and judgements rather than on a deep analysis of proven facts.
We aim with this blog to provide answers and support to start-up managers helping them in the daily decision process by benefiting from experiences of managers and advises of experts in the relevant domains.
Having be part of several start-up foundations, we have strong convictions about the success paths that we can express in 4 fundamental Layers having an equal importance in terms of contribution to success. We analyzed a bench of companies and demonstrated that failure occurs when one layer is weak.
We will use these Layers as the Ariadne’s thread to guide us all along publications. We want this blog to be open to discussions, debates and new ideas. We will accept contradictory views and we will analyze them in the ambitious objective to build a strategy for success.
The 1st question we may have is about the choice of the layers. Many publications and studies have been done about Factors of Success. The most popular one is based on an analysis made by Bill Gross on 200 companies in 2015 and he ended-up with the following:
Let’s look at these factors in terms of actions to do towards success:
1) Timing 42%
As per Bill Gross, a right timing is when the offer comes at the right time on the market, not too early as market acceptance could be long, not too late as many competitors are already in the place. But timing is set when the start-up is launched. It is part of the vision. If the vision is correct it means that the timing is perfect. After the creation of the Start-up we just can notice it, we cannot change the time, we cannot go back to the past nor jump into the future. Bill is right, this is an important element of success but we have no tangible action after foundation. When the timing is wrong, we can obviously react by changing the offer or the positioning and this is, for us, part of the Marketing layer
2) Team/Execution 32%
We prefer to separate these 2 factors. We cannot have a good execution without a good team but we can have a bad execution with a good one. So, a good TEAM is not enough but it is an important prerequisite factor. As a priority, building the right team must be one of the most important action of a CE0.
Execution is a key factor of success. We fully agree with Derek Sivers:
“Ideas are worth nothing unless executed”
A good execution means Operational Excellency on key domains. This is for us THE key factor of success. The main difference between a Start-up and a Big company must be the agility not the unprofessionalism. The main domains of Business, Product and System Management must be organized for efficiency. By avoiding being slow with heavy procedures, like could be some big group, start-ups may fall into a messy system with no delegation, no defined processes, no clear KPI…
3) Idea 28%
As the Timing, Idea is part of the vision.
“An industry begins with the customer and his or her needs, not with a patent, a raw material, or a selling skill” Theodore Levitt.
4) Business Model 24%
We prefer to call it Marketing as Business Model is not enough. We agree, this is an important Success Factor. A Marketing Strategic Plan is a must.
5) Funding 14%
We all agree, Money is mandatory to execute the plan. In 2015, funding was easy in California, this is why it was not the most important factor and only counted for 14% as per Bill Gross. Nowadays companies may need several sources of cash and some may prefer getting loans keeping shares to founders as long as possible. We will debate this point in due time.
In conclusion, we agree on the factors but we want to add that they do not occur at the same time.
- Timing, Idea are set before company creation and then we just have to live with
- Team, Finance must be defined very early and readjusted as needed
- Marketing, Execution are permanent processes
Then we will pursue with our plan:
- 1) How to build a TEAM
- 2) How to Finance a start-up
- 3) What must be a Strategic Marketing Plan?
- 4) How to execute in Excellency
