4 guidelines that can turn startups into thriving businesses
There's a great deal of energy and resources being directed today toward startups and fostering startup cultures. Startups are energizing. They attract investment capital. They use resources to plan, develop and launch new products and ideas. They offer the potential to create jobs.
But the downside to startups is that most of them fail. For every great idea that becomes a thriving and growing business, there are many others that don't. The reasons for failure are as varied as the number of failures. However, the successful startups usually have four things in common: a clear concept, a focus on relationships, a value people pay for, and continued focus while they grow.
Here’s more on each of them:
Clarity of concept means a clear value proposition that's easy to understand. If you're starting a business, can you clearly explain your concept in less than 60 seconds? The explanation needs to communicate three things: what you do, who would buy it and why it's valuable.
The most powerful concepts are those that are understood quickly and clearly That's the power of simplicity. People can easily relate, frequently saying “Why didn't I think of that!”
Focus on relationships. No one gets there alone. The founder has a vision, and the vision requires people to become reality. Successful entrepreneurs align themselves with people who understand the vision and are able to contribute.
Help can manifest itself in many ways, be it capital, talent, connections or guidance and advice. The most successful entrepreneurs identify, nurture and strengthen the relationships that can help them succeed. They build trust and work to identify opportunities where both parties can receive value.
Monetize what you offer. Find someone who will pay for what you offer. After all, that's what business is all about. Develop your product or service to the point where you can sell it at a profit. Then, go make some money!
People know when something is right. More importantly, they know when something doesn't feel right. Things that feel right trigger an emotional reaction, and are a strong influence on whether to buy.
When you sell your product at a profit, several things happen. First, you learn from users who can tell you what works and what doesn't. Second, you test price points to determine the perceived value for your product or service. Third, and this is very important: You prove to investors that your startup is more than a concept; it's a business that can make money.
Stay focused as you grow. As you expand, maintain the clarity you had when your business was a startup. The complexity of executing on an idea and turning it into a growing enterprise does not have to be overwhelming. The stabilizing factor is the simplicity communicated in your 60-second explanation. Keep sight of what made the idea work in the first place.
Build your organization to bring the idea's simplicity to life: Strategies focus on how the idea connects with customers; marketing messages reflect the power of the idea's simplicity and the value customers realize; and employees get it and are passionate about it.
Lastly, realize that everything around the business will keep changing. Understand the changes and appreciate their impact. But don't necessarily react to each storm or strong current that may try to pull you off course. The founding concept was sound; keep focused on it.
Ken Cook is co-founder of How to Who and co-author of How to WHO: Selling Personified, a book and program on building business through relationships. Learn more at www.howtowho.com.
WBJ Web Partners
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