- June 27, 2019
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Controlling the Controllables – Avoid Startup Failures
By Mia and Elie Habib
In such a highly competitive business era, particularly if you are based in Silicon Valley, there can be lots of variables bouncing around in your head that need to be addressed in order to form your startup. Times are hectic but exciting. However, it is important to not let the whirlwind distract you from the hyper-attention to all the details that are necessary for the initial phases of the startup if you want to ensure success.
The startup world can be daunting, and you might find yourself questioning if you are up for this challenge. You might even be wondering if you are going to fall into the 90% of startups that fail or make it into the 10% of success stories. To help yourself get into the right mental space to make your startup succeed, you first have to get your facts right and change your mindset. According to an article from Fortune, Cambridge Associates, a global investment firm in Boston, conducted a study in 2017 of 27,259 startups from 1990 to 2010 and found that the startup failure rate actually hasn’t risen above 60% since 2001. The highest it ever even got to was 79% during the dot com bust of 2000. While these are still high odds for failure, you must change your mindset to pay more attention to that 40% of startups that succeed in order to maintain a better attitude throughout the trials and tribulations of the startup world.
Once you put yourself in the right mindset, one of the next most important controllables to focus on is timing. While the startup may just happen to emerge in bad timing with other external variables you can’t personally control, like the economy, wars, and act of God, it is important to pay attention to the world around you and control when you make certain decisions relative to other companies in order to optimize the potential for success. In an article written by Harvard Business Review, one of the most common mistakes in startups out of the four general ones they came up with was mistiming the market. An example they offered was in the way the Microsoft’s Windows phone died because it came to the market five years after Apple’s phone and three years after Google’s phone. From a young age, we often hear “If you’re early, you’re on time, and if you’re on time, you’re late,” and the same applies in the startup world. Being on time to the market with your service or product is good, but being early is better.
One last thing to work on controlling, particularly in the initial stages of the startup, is overpreparing for the long-term. One common mistake people make is that they don’t look at the long-term road ahead, but instead try and pay attention to each step as it comes. While this tactic is helpful in terms of helping you to not get overwhelmed by the work ahead, this may also cause you to forget about the things that will matter more in the future than they do right now. In an article by George Deeb on Red Rocket, he lists 13 reasons as to why a startup may fail. Of these reasons, there are four specific things that fall under the same umbrella of under-preparation for the long-term. These four failures include a lack of go-to-market strategy, a lack of revenue model, a lack of sufficient capital or VC experience, and a lack of a roadmap to ROI. While you may find yourself thinking that you can address some of these issues later, the reality is that bad habits form when you continue to make excuses for why it’s not important to get done now. Running a startup in a lot of ways is like running a marathon, not a sprint. In order to effectively run a marathon, you must strategize your tactics according to the entire path ahead of time and then set a consistent pace to survive.
There are many more ways in which a startup can fail, however, if properly addressed prior to the rise of the problem, these reasons can turn into simple little obstacles that become easy to resolve. The process may be grueling, but it is important to remember that even Google and Microsoft started where you were at this moment.
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