You don’t need to pick up a business paper to see the impact startups are making to our everyday lives. From hailing taxis and getting your phone recharged, to ordering groceries and booking adventure travel, they seem to be sprouting everywhere. In fact, it almost seems like this is the golden age of the startups.
To some level, this is true. The spurt in access to technology over the last decade has levelled the field, making it easy for small ventures to challenge the status quo. But despite this, cracks seem to be appearing, and while the news might still be packed with stories of people who actually lived out their dream, it’s also beginning to focus on what happens when those dreams shatter. But if you’ve also got your own dream and are slowly beginning to put itin action, you can’t afford to ignore the lessons other startups can teach you:
1. Taking the easy way out, or the ‘me-too’ effect
For many startup founders, becoming an ‘aggregator’ has become the ultimate aim. It almost seems like the favourite formula is to attach the words ‘Uber for…’ to any idea you might have. While the success of Uber has indeed changed how we perceive new startups – not as fledgling organisations, but as potential world-beating giants – to just adapt someone else’s brilliant idea is to shortchange yourself. This ‘me-too’ effect might seem like an easy way out, but then you’re restricting your vision within the bounds of someone else’s. Don’t copy blindly, and don’t shut off the doors to success because you’re too obsessed with one idea. It’s a big world out there, with enough space for many more innovators, in many more areas.
2. Ambition sometimes exceeds capabilities
For many startups, initial success may lead to ambition overpowering their capabilities. We’ve seen this on many occasions, when it seems like there is no way your growth will ever stop – so why stop spending? Don’t make this mistake with your baby – don’t let ambition blind you to the need for laying down a foundation that’s actually strong. User growth may slow down, new competitors may emerge, and the business environment may change. Conserve your resources, make sure your infrastructure can be scaled up and down as required, and don’t go on a hiring spree without considering the cost implications. Take it slow, and play it long-term!
3. A short-term focus may prevent long-term success
This leads from the previous point – a short-term strategy won’t help. If your plan is to quickly grow and cash out, you’re in the wrong business. If you think your startup can attract large amounts of venture capital based on an initial spurt, you’re mistaken. After all, a startup is still a business to which the ‘normal’ rules of the economy apply. Make sure your finances are in order, make sure your plans are laid out for the long-term, and above all, be clear that you are in this for the long haul.
4. Using purely salary-centric approaches to HR
For many ambitious and hard-working professionals, a startup is the ideal environment for allowing their creativity and talent to flourish. Work hard, and enjoy the rewards, that’s what this is all about, isn’t it? And it’s also a win-win situation for you, as eager, up-for-anything employees are just what you need. But that’s sometimes a fallacy – a salary-centric approach to hiring works only in the short term. On the contrary, to prepare for long-term growth, you need to prepare a company culture that is not just driven by success but is also kind, accepting, and allows for personal growth. Take on people who’ll return your loyalty with their own, who’ll weather tough times with you once they see you’re for them, and those who believe in the company’s success, not just their own!
5. Fear may cause VCs to become more cautious
According to one statistic, over 80% of startups end up as failed ventures. As more startups come up, this rate is likely to rise further, leading to even tighter purse strings. How do you combat this? As mentioned earlier, the key is to have plans for long-term growth, without letting ambition or greed affect your startup. You have a vision? Treat it as a vision, not as a get-rich-quick scheme. Any VC worth his salt will want to see a proper business plan,and wants to deal with people who have a sense of what it takes to succeed in business. Startups, like any other human effort, aren’t built solely on ideas, brilliance, and creativity. It takes a lot of patience, understanding of human nature, and of course, a well-honed business and financial sense.
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