Ever increasing number of people around the world are interested in starting their own business; from college students looking for fast money, to stay at home parents and business men and women looking for greater control over their work lives. Even though we have seen an increase in the number of businesses that are formed, we have not seen a significant increase in the percentage of those who succeed.
Some estimates say that as many as 90% of new businesses fail. Some of this is due to the lack of understanding of what makes a great idea, other businesses run out of cash or ignore their customers. Over the years, we have worked with many startups and there are certain characteristics the successful ones have in common.
Solve a problem or "invent" one
This is perhaps the most important principle to remember. If you see a recurring problem, view it as an opportunity and work to create a solution. Sometimes, even the most basic ideas can have a far reaching application, especially if they make life simpler or richer for the customers. However, sometimes we need to solve a problem we don’t even know it is a problem yet. Think about Uber or the Apple products. For example, Steve Wozniak wanted to have his own computer. This was unusual in 1975 when computers were the size of a room. But he actually had the abilities to build one and he not only solved this problem for himself, but it was a “problem” Apple solved for millions of people in the coming years.
Be passionate and leverage expertise
It is a good idea to start something that you know well, that you are passionate about, something perhaps you have been interested in doing or learning about since you were a child. Think of your current work, your hobbies or other skills that may come naturally to you but could be pretty unique for others. Of course, some skills are easier to market than others so just because you love to knit, it may not be the best idea to open up a store that sells yarns.
Additionally, make sure you look for something you can understand from the users’ point of view. Ideally, you will find something you - yourself would love to use. These types of solutions lead to greatest long term excitement and tend to succeed.
Don’t spend your nights thinking about the competition, but rather work on being the best, most unique in providing your solution.
The most successful companies find a way to differentiate themselves from their competition, especially if they are competing in a saturated market, this is going to become crucial. Not everyone has the advantage of being a first-mover in their market, however many can leverage clever differentiation to become memorable. For example, if your competitors are trying to outcompete each other on price, it is wise to highlight some other feature of your offering and compete on value instead. With that said, don’t spend your nights thinking about the competition, but rather work on being the best, most unique in providing your solution and your competitive advantage will arise naturally.
Additionally, if you want to start a startup, you're probably going to have to think of something fairly novel. A startup has to make something it can deliver to a large market, and successful ideas of that type are very valuable and rare.
Don't work alone
Surround yourself with a knowledgeable team of mentors, supporters and colleagues and value their opinions and expertise. Young entrepreneurs often feel the need to be overtly secretive about their startup ideas, however very few can truly succeed alone. Diverse opinions can only help you perfect your idea. Trust us, people are not trolling the internet looking to steal ideas. An idea is nothing without proper execution. So don’t worry about protecting the idea, rather spend your energy on executing it correctly. Especially if you are a young entrepreneur, surrounding yourself with experienced entrepreneurs as your advisors is an important key to your success.
Strive for enjoyment
If at all possible, try to make it enjoyable for people to engage with your product or service. People like to have fun. Sometimes even the simplest ideas can benefit from this. Think about applications such as snapchat. They allow people to have fun and since the early adopters enjoy them, they invite others to join in the fun with them. If you can get users to share with non-users in large numbers, you will enjoy the benefits of getting new users with little effort and money. Word-of-mouth works in the digital world the same way as it does in the offline world and can be incredibly powerful for getting you new business.
Be prepared to hustle
You always have to be honest with yourself. All startups have problems and more than 90% of them fail. However remember that even many of the most successful startups were really close to going bankrupt on their way to stardom. You need to be prepared to work around the clock.
At first, most entrepreneurs are very enthusiastic about their ideas, full of motivation, but with every problem, they tend to lose this motivation. But don't forget, giving up is always the easiest solution. Lukas Horak, CEO of PLATFORM weighed in on this issue:
There are many different factors that ultimately decide the faith of a business idea. Some ideas just simply work while others don’t ever seem to succeed even though they were good ideas. Sometimes it is all about having the right timing. A post mortem analysis of 101 startups shows the top 10 reasons why they failed.
It is good to understand why others fail so that you do not repeat their mistakes. So, follow your dreams and do something you enjoy because you are going to live and breath your idea at the beginning. Surround yourself with a great team of mentors and supporters, you will need their help to stay on track when giving up will seem as the easier option. Stay rational and honest with yourself and use all available metrics to inform your decisions - key metrics really can be the key to your success. And lastly, try to solve a real problem a need or desire. People are open to new experiences as long as they see some value in them.
We hope you found these ideas helpful and that you will check out some of our other tips on the blog. Good luck with your ideas!