Startup Success

Welcome back!  If you are new to the blog, be sure to check out the first blog, “5 Reasons Startups Fail,” of our leadership series. This week, I had the pleasure to interview Pat on the topic of the race to startup success. Please grab a cup of coffee (or a cocktail) and sit back while we supply you with some hard-won advice on how to not only survive, but thrive in Startupland.

So, let’s get into it! “How do you believe Startups achieve success?”

“One critical thing is to realize that you are in three important races. This isn’t the “Three-legged Race” from our goofy times with friends as kids. These are three races you have to run simultaneously and not get confused as to which is which.  Each one of these three things is a race.”

Here’s how you win the race to startup success. This is where Startups slip up – they don’t realize you need to beat your competition in not just one area, but three. 

The first race is the race to revenue. You need to acquire customers and/or sell your services. This is critical because it proves that the fundamental problem you set out to solve needed to be solved in the first place. 

The second race is the race to relevance. In everyone’s market, there will always be competitors. So how do you differentiate yourself? You have to rise above the noise and establish yourself as a business and thought leader in your space. Relevance means a small company can have a large influence on a market. Being first to market is risky, as many people want to wait until that first company fails and learn from their mistakes.  However, if you are first, you set the pace – it’s called the first-mover advantage. I’d always rather be out front – market making is one of the greatest things a Startup can achieve.  

The third race is the race to profitability. Profitability, which essentially means to break even, will allow you to control your own destiny. You can raise money when YOU want to raise money. And raise it at a price that makes sense to the company. Until you get to that point, you will need to raise money at a price set by your investors, leaving you without control.  You will never win this race without the other two – someone will overtake you.

Remember, the most important takeaway is understanding the criticality of being in all these races simultaneously.  The most successful startups understood:

1) The fundamental problem to solve and built innovation to solve it.

2) They had to get to market and raise their profile to be leaders in their space. 

3) They needed to be in control of their own destiny.

These insights are not just for tech startups – they can transfer over to any market where you will use innovation. You have to do this to win the race to Startup success. Now that you know about these races you are probably already in, how will you apply that knowledge to be successful? 

Stay tuned for our next blog, where I will be asking Pat for his take on the burning question of what qualities make a successful Startup leader because, let’s face it, not everyone has the tools to be successful.  See you soon!