6 characteristics of startups that ultimately make it!

There are a number of components that make or break a startup business. Over the years there have been a few that stand out above the rest. I have seen startups come and go. And Ivé seen some of them become well-organized, super-effective profit-machines. Unfortunately the former is a lot more common than the latter. Most startups fail, or should I say they fail to provide the founders and the support team around them with adequate pay-off with regards to the often very hard work involved. So what does make one startup a success and another a failure? There are a lot of factors involved and it is difficult to recognize and categorize all of them, but there are some common denominators to those businesses that finally make it. Here is my list, while it may not be complete or correspondent to another man´s list, I have found these qualities to be a good predictor of longer-term startup success:

1. Frugal living. Keeping costs low is one of the most important prerequisites for success. I don´t know why it has such powerful predictive capabilities regarding to ultimate success or failure, but it is a time-tested and empirical piece of the puzzle that cannot be overlooked. First of all, keeping costs low gives entrepreneurs time to get a firm foothold in the market place. Providing that you have something of value, it may take some time before enough people recognize that value, and to survive that time period entrepreneurs need capital. The less capital they need, the easier it is to keep the operation going. Besides this there seems to be something cultural about keeping costs low, i e startups that keep costs low tend to be led by entrepreneurs who live pretty simple and straightforward low-maintenance lifestyles. They keep pushing towards their goals, and money is more of a vehicle in order to realize their dreams than it is a goal in its own right. This brings us to the next item on this list.

2. Singleness of purpose. Those entrepreneurs that tend to make it have a certain type of intensity about them. This does not mean that they are outgoing or outspoken. There seems to be successful entrepreneurs among all different personality types. What it means is that they are often very passionate and knowledgable about their line of business and their enterprise. You can see it in their eyes and hear it in their voice once you start discussing with them. They never get enough. They can sit until 3 am in the morning and discuss what to other individuals would seem as trivial things. To put it bluntly they are, in the purest sense of the word, nerds. They know it. They love it. And the market place often enough loves it as well. There is nothing like a good dose of passion to spark things up. And there is nothing better than pure passion to ignite that very powerful engine inside inside our souls which we refer to as singleness of purpose.

3. Entrepreneurs. The entrepreneurs make up the heart of any business. They are by far the most important component in the equation. I would rather deal with fantastic entrepreneurs with a lousy idea, than I would deal with not-so-great entrepreneurs with a potential blockbuster. Good people tend to do fantastic things, given enough time. Lesser entrepreneurs can screw up a gold mine. If I could just pick one item on this list this would be it. Show me some great entrepreneurs and I will show you a good investment opportunity. Show me founders with heart, passion, smarts and good working ethics and the world will beat a path to your door. Really, it´s that simple.

4. Persistence. No matter what line of business you choose to enter there will be some major obstacles down the road. All businesses move in cycles. There will always be both good and demoralizing, bad times. While the good times often seem to pass by surprisingly fast, it is of paramount importance to withstand the bad times firmly. There is nothing as valuable for an entrepreneur than sheer persistance. It will overcome most obstacles, given enough time. It transcends smarts, capital, connections, even luck to some extent. If you just have sheer persistance things tend to work out- eventually. Whenever you read about a successful entrepreneur in the magazine know this- they have all failed a thousand times. No one knew about them back then. Nobody saw them struggle. Nobody cared. There was no one around to see them tweak their approach a little, try again, try harder, this time with even more determination. The world will notice when you succeed. The thousand mistakes that build up to ultimate success will always go unnoticed. And the story about the persistance so dearly required to succeed in business will be lost somewhere along the way.

5. Provide value to customers. In order to make money from a business idea it needs to solve a problem for potential customers. It needs to bring value to their lives. The more customers you affect with your product or service, the more money you tend to make. But you must provide value. There are a number of ways to provide value. Find an existing product or service and make it better. Or find a need that is not currently being met by the market place. Since the world is a big place and there are a lot of people doing business, many ideas have already been battle-tested and for that reason most businesses evolve around the concept of taking an existing idea and improving on it slightly. Or you take an existing idea and try to convert it to another arena. An example of this would be to take an existing business idea that is bringing value to customers and convert it to the world of online business. Providing you build on the strengths of the new medium, you can very often get some great competitive advantages from making this shift.

6. Keep moving forward. The best entrepreneurs tend to always be moving forward. Some of the most successful ones I have met or worked with keep suprising me by always adding small, almost unoticable improvements to their business. They never stop improving. They tend not to be ovely concerned by what their competitors are doing. They are so focused on making their vision a reality, they simply don´t have the time to think about anybody else. Except for their customers. Successful entrepreneurs always try to make their core group of customers happy. In most instances I have found this customer satisfaction focus has less to do with making money than one might realize. Instead it is often rooted in a deep sense of pride and achievement that happy customers brings them. Paradoxically, by not thinking too much about what their competitors are doing or about how to increase profits, and instead focusing on continually improving the customer´s experience, these companies tend to do a lot better than their peers. The empirical evidence I have seen tends to support the idea of launching now, don´t postpone it. After that you need to continuously improve on your business and on the customer experience. An important part of these improvements is to be “close to the customers” and understand their needs and how you can fullfill those needs in the best way possible. Try to improve all the time. If something fails, try again this time with something slightly different. Don´t overanalyze. Don´t procrastinate. Just keep moving forward. Just keep improving the value you are offering to the world. All these small improvements tend to add up pretty impressively over time. A good startup is like a good bottle of wine. It tends to keep improving over the years, if you just give it the time it requires.

So there it is. The six qualities I have found in most successful entrepreneurs, after a lifetime of doing business and what seems like an eternity of learning from my own mistakes. Should you possess most or all of the qualities I have listed above, I can tell you that your prospects of making it as an entrepreneur are exceptional. Most of us have but a few of the qualities on the list, and we need to understand the importance of the others and try to improve on them. Not all people are cut out to be great entrepreneurs, but many can achieve a lot more than they might initially believe. As in most other endeavours in life it very often comes down to persistence and attitude. If you keep trying to do it, and yoy truly believe it can be accomplished very often, life will take you a lot further than you initially thought possibly. Go do it!