Startups are full of promise and excitement, but the flip side is that they’re also full of risk and uncertainty. There are a lot of great ideas that somehow never get off the ground, and plenty of questionable ideas that ended up being massive successes. Looking objectively at a list of successes and failures, it’s hard to pinpoint any one reason why a startup would succeed over another.
Put simply, that’s because there is no one factor for success. There are dozens of factors that determine the eventual success or failure of a business, and these 10 are some of the most critical:
1. The Idea. The strength of the idea might seem like the biggest factor responsible for a business’s success, but it’s really only a small element of how things might turn out. Consider Google, whose core idea of an interactive web search was already being implemented by dozens of competitors. But because their plan, execution, and timing were superior, that lack of originality didn’t cripple their chances of success.
2. The Leader. Leadership is important in startups. Leaders make the decisions, set the vision, and inspire people to work harder for a group’s goals. Put an incompetent leader in place, and not only will high-level decisions be made less effectively, the entire morale of the group could be put in jeopardy. On the other hand, a skilled and experienced leader could turn even a weak idea into a successful one.
3. The Team. Entrepreneurs are important, but they rarely accomplish great things alone. Successful businesses employ anywhere from a handful to hundreds of people, and those people will be the ones maintaining the business, driving innovation, and executing your high-level goals. Hire the right people for the job, and you’ll never have a problem. Hire the wrong people and your best-laid plans could be ruined.
4. The Capital. Working capital is important, and so is your early stages of funding. Don’t panic if you can’t find an investor; personal and familial investments are possibilities, and don’t rule out the possibility of opening a line of credit. Once secured, remember to keep an eye on your cash flow — one wrong move here could put your cash into negative territory.
5. The Plan. The plan involves more than just your core idea. It includes your goals, your targets, your operations, and more. Everything written down in your business plan counts as part of your “plan,” and the degree to which you researched and fine-tuned this will greatly affect your chances of eventual success. The more thorough you are here, the better.
6. The Execution. That being said, a plan is only as valuable as its ability to be executed. If you have a great plan, but botch its execution, your entire enterprise could be compromised. On the other hand, if you have an okay plan and execute it perfectly, you’ll have a leg to stand on, and you’ll have a key understanding of what did and didn’t work from your original concept.
7. The Timing. Timing is important from a competitive perspective, and it’s led many businesses to prominence despite a chaotic and busy market at their time of entry. When YouTube came on the scene, for example, there were already dozens of video streaming platforms. But because YouTube launched at a critical moment — after high-speed Internet became the norm but before any other streaming service had risen to prominence — it enjoyed radical early success.
8. The Crisis Response. No matter how well you plan or how hard you work, something is going to go wrong. How you respond to a crisis is far more important than how likely you are to avoid one. One poorly treated crisis is all it takes to put a company under, so think carefully about your response plan.
9. The Marketing. How you package and market your business matters. An inferior product that’s branded in a more appealing, exciting, and unique way will always outsell a superior product with plain, non-memorable branding. It may seem superfluous, but it critically affects customers’ buying decisions.
10. The Growth. Finally, the path you choose to growth plays a significant role in how you end up. Grow too fast and you’ll stretch yourself thin. Grow too slow and you’ll never get anywhere. Find a balance, and treat your growth carefully.
If you can look at each of these factors objectively and say that your business meets or exceeds their demands, chances are you’re already primed for success. If you notice any one of these factors being weaker than the other, it’s a cue to invest more time and resources into that weakness to overcome it. For some factors, like timing and execution, this can be nearly impossible, but try to make adjustments where you can and maximize your chances for success.