How to be among the start-ups that succeed
Nine tips to help stack the odds in your favour
Soundwave co-founder Brendan O’Driscoll pitching at SXSW in Austin, Texas.
Most start-ups fail. As an investor in early stage technology start ups, how do I try to spot the ones that have the best chance of succeeding? Over the last four years, I’ve been pitched to by over 1000 aspiring entrepreneurs and invested in over 100 startups through NDRC LaunchPad. I’ve learnt from the ones that look like they’re going to succeed – Fieldaware, Logentries, Soundwave, Newswhip, VideoElephant and Boxever to name just a few - but more importantly I’ve observed the ones that tried hard but failed.
If you’re an aspiring entrepreneur, look at the following list and assess yourself and your idea against it. I can’t guarantee success but I offer the following to help you focus on the right things and stacking the odds in your favour.
1. Don’t do it alone
Building a business is tough and no one person has all the skills required to do everything by themselves. One of the first tests we apply at NDRC is whether the founder can convince someone else to join them on their journey. You need someone else to bounce ideas off of and support you when things get tough. Peer support from a co-founder can make the difference.
2. Fix something don’t copy something
If you can copy it, so can somebody else. Have a deep understanding of the problem your customer faces and aim to be not just a little better than the existing solution but exponentially better. It’s tough to displace existing solutions if you’re only a little bit better.
3. Be customer centric
Put yourself in your customer’s shoes from day one. Know them better than any competitor does and aim to deliver such a compelling user experience that they will always come to you with their problems first. The best competitive advantage you can have is knowing your customer better than anyone else, and acting on that knowledge.
Great entrepreneurs listen all the time – to their customers, to their advisers, to the market, and to their staff. Absorbing this information and making well thought through decisions sets them apart from those who only seek endorsement of their own views. There’s a lot of stuff you don’t know – listening helps you address that deficit.
5. Go after a big enough market
Make sure that you’re not wasting your time, effort and money on a market that isn’t big enough. Understand the size of the market and how competitive the landscape is before you commit.
6. Know what makes you different
To attract a consumer’s attention in today’s busy marketplace, you need to be different. And not different just for difference sake. Understand the importance that difference makes to your customer because that is why they will buy your product or service over your competitors.
7. Surround yourself with smart people
Good entrepreneurs have an uncanny ability of attracting highly talented people to work with them. Know your own skills gaps and actively seek to fill them with exceptional people. Attract them with your passion, enthusiasm, energy and vision.
8. Create a bit of luck
Most entrepreneurs will point to that lucky break they got - winning that sale, attracting that key investor, or overcoming that technical hurdle. The reality is they achieved this by sheer hard work. And to be lucky you have to work really hard. Take every networking meeting you’re offered. Answer every customer query immediately and personally. Drink coffee with lots of investors. If you do this, and tick the boxes on all the other criteria I’ve flagged, you will get lucky.
9. Being an entrepreneur is not a job, it’s a lifestyle
Do not do it because you think it would be cool to work for yourself. It is one of the toughest career choices open to you. It is all consuming and will affect you and your loved one’s lives. Go into it with your eyes wide open, understand how much it will ask of you and be willing to make the necessary sacrifices.
This is by no means a definitive list, buts it’s a great place to start. Be honest with yourself as to how you rate against each of these. Ask a friend to assess you and your idea against them too – because entrepreneurs have an uncanny way of fooling themselves. You need to be like that sometimes, but to increase the odds of success be honest with yourself.
This idea may not be right for you, but the next one...