Over the last decade, we have seen a massive explosion in the number of startups. Today there are thousands of startups seeking to disrupt industries and new ones coming up every month. This is remarkable because just two decades ago, you could count the number of startups on your fingers. It’s great for entrepreneurs as it democratizes entrepreneurship and provides access to capital for budding entrepreneurs unlike the era when only a lucky few would get funded by VCs (venture capitalists). But with so many new entrants in markets all over the world, how can you ensure your startup succeeds?
Here are 10 ways to set yourself apart from the pack:
10 Ways Your Startup Can Survive
The first thing to remember is that despite popular opinion, not all businesses are created equal. Just because a startup is doing well in an earlier phase of growth doesn’t mean it will be successful later. Take Google, for instance. It’s not hard to find articles about how Google was initially unsuccessful and lost several million dollars before finding its footing and becoming one of the most powerful tech brands on earth. There are also numerous examples of startups that did well early on and then failed after they reached a certain level of growth, such as Apple’s former partner MobileMe. Businesses work in cycles; some last long while others fail quickly, but through market dynamics business conditions change over time, even for the best companies in the world. If you are interested make sure to read some articles on What is pro rata
If your startup is entering a crowded market with established players who have secured their positions already, there are at least three things you can do to compete with them. One is differentiation: make sure your product or service differs from existing ones in a way that customers are willing to pay for, such as easier use or better quality.
The second is market expansion
Expand the market by growing your share even when it’s crowded. This could be through innovation and creating new products/services no one else is offering, developing markets no one has tapped into, increasing customer loyalty and retention through great customer experience or cost-effective pricing strategies, etc.
The third is branding
If you’re having trouble differentiating from competitors, then brand yourself instead—this means earning customers’ trust with special offers like price guarantees and giveaways during sales events; marketing and advertising to create awareness and loyalty for your brand; establishing a team committed to delivering superior customer service, etc.
The fourth is differentiation-by-acquisition
Instead of competing with all your competitors in the long run, look for opportunities to buy them out and then integrate their businesses into yours. This strategy is generally not recommended; unless you’re able to buy a competitor’s business at a low price (or even better have it come to you at no cost), or there are strategic reasons that make such an acquisition worthwhile, this strategy won’t help startups find success quickly.
The fifth is disruption
look for ways to reinvent your industry, and provide something so innovative that it disrupts the existing business model. This could be by creating a completely new product/service within a market (such as in social media), or innovating faster than competitors, accelerating adoption of innovation and thereby disrupting the status quo. While this may seem difficult, it’s not impossible, as evidenced by how startups like Netflix disrupted their respective markets.
The 6th tip is about hiring the right people.
Hire passionate individuals who are committed to growing your startup—hire people better than you are because they might have ideas you haven’t thought of while providing the leadership necessary to motivate others towards greatness. When choosing employees, look beyond flashy resumes or educational credentials to people who are willing to roll up their sleeves and do the hard work it takes to grow your company.
The 7th tip is about making sure everyone on your team can play well with others (or at least not badly with others).
When hiring make sure you know how each potential employee will fit into the larger picture; consider cultural fits as a part of your overall hiring criteria. If the new hire doesn’t like working with certain people, or has problems following directions, or isn’t a good listener, or talks back when criticized, etc., then that person won’t be able to contribute effectively towards growing your business.
The 8th tip is about planning ahead for growth.
This means creating goals and objectives which clearly state what you want to achieve, when you should achieve it, and what resources are needed to get there. Create a business plan that documents your strategy for growth, including projected revenue, expense, profit/loss statements and financial forecasts. Developing a strong management structure is key to helping you meet those goals as well as providing the foundation needed for scaling up.
The 9th tip is about evaluating competitors to ensure you’re not falling behind.
Find out what your competitors are doing by learning how they’re growing and who their customers are. Keep track of new entrants, merge-and-acquisitions activity in your industry; if one or two companies become much bigger than everyone else, ask yourself why this happened and whether it might happen to you as well.
10th tip, just in case all else fails and your startup is still struggling to survive amidst competitors which are far more established than yours, is about finding a way out; consider selling your business to one of those competitor companies which has a better chance of success than you do. But before doing so make sure you’ve tried everything else first.
A few other tips
Early-stage ventures are about building a product that solves a market problem; so take the time to establish whether there’s indeed a need for your service or product in the first place, as there’s nothing worse than spending lots of time and money developing something that no one wants or needs. Make sure you’ve done extensive research on your target customers/market before starting development!
Startups often make the mistake of trying to sell their idea too early. This is usually because they’re keen to hit the ground running and get some kind of validation from potential customers; but this puts off investors who want to see tangible products or services being developed first (assuming, of course, the startup is raising capital). In general it’s better to keep your product development activities in-house for as long as possible, even if that means going without outside investment capital.
In the early stage of your startup, it’s advisable to get someone with a lot of experience or expertise running the show; while at this stage you should be involved in every major decision being made, start putting some distance between yourself and operations so that you can focus on high-level activities such as sales/marketing, finance/accounting, business strategy (especially when creating a business plan), etc. But be sure to stay close enough to what’s going on within the organization so that you’re aware of any operational issues which need your immediate attention.
Board members who aren’t actively involved with the company should be replaced by those who are. They’re not contributing enough toward meeting your business objectives, and they’re doing nothing to help reduce your risk profile (if you have a board member who’s constantly disagreeing with everything you say/do then that person needs to go). Also, boards composed of more than 5-6 individuals usually become dysfunctional because there are too many cooks in the kitchen; so think twice before inviting people onto your board.
This is where it gets tricky for startups: What type of legal entity do you form? Sole Proprietorship? Partnership? Corporation? Or LLC (limited liability corporation)? The different options have advantages/disadvantages which need to be considered carefully. Whenever possible, incorporate in Delaware (it’s a great state for business owners) and then you’ll automatically be an S-corp unless you decide otherwise.
You should have an office of some sort; even if it’s just a small desk in the corner of your bedroom! It’s important that you don’t work from home for too long because it creates blurred lines between personal and professional activities which can distract you from doing what needs to be done (and may expose your company to accusations of impropriety). But on the other hand, having on-site employees will also create issues with income/employment taxes. So pick somewhere within driving distance where there are office buildings equipped with reasonably priced “coworking” facilities.
You’ll need your own website, and preferably a domain name that’s easy to remember/type into a web browser (there are many places where you can register a domain name for free). Also important: Make sure all of the information on your website is correct at all times; which means thoroughly vetting any content or information contributed by others before including it on your site. It’s also essential that you have an email address so that people who are interested in what you’re doing can contact you directly with questions/comments/suggestions etc. Use gmail or something similar because it keeps things simple.
As the world of technology is evolving rapidly, The Era Of Tech Giants has started to dominate the landscape. Entrepreneurs can no longer be complacent and must continuously innovate to come up with products and services which can disrupt older models or meet new customer demands better than their competitors. These are some of the ways in which startups can survive competition from tech giants; in an era where big companies like Amazon, Google, Microsoft, Apple, etc., keep coming up with newer innovations that have a ripple effect across entire industries, it takes courage and skill to stay ahead of them—enough for anyone who wants to start something new where others have failed before!