Successful startups are dynamic, innovative entities, with great potential, if they are successful, to transform entire sectors with cutting-edge ideas and technologies. The success of a startup, however, is never guaranteed, and depends on a series of critical factors, so let’s see what are the fundamental characteristics that distinguish between a successful startup and one that, instead, fails.
Vision
One of the most important characteristics for a successful startup is to have a vision that is clear and ambitious. We cannot have the simple goal of making profit, because our purpose must inspire and motivate the team to achieve the goals. According to Harvard Business Review, startups that define a strong and clear mission perform better than those that focus exclusively on the financial aspect. To be effective, the vision must outline the problem that the startup intends to solve and the way in which it intends to do so in an innovative and unique way.
Founding Team
The founding team is a crucial aspect of a successful startup. The skills, experience and synergy between founders make the difference between startups that succeed and those that fail. According to CB Insights, an inadequate team is the main reason why a startup fails. The ideal team should have complementary skills and cover the different business areas: product development, marketing, sales and finance. Soft skills and more relational aspects such as the ability to work in a team, resolve conflicts and make quick decisions are also essential.
Focus
A successful startup always places the customer at the center of its strategy. This means analyzing and fully understanding their needs, desires and behaviors. Startups that maintain a constant focus on their target audience and adapt themselves based on feedback have a big competitive advantage. Steve Blank, for example, proposed the customer development approach, with which startups rapidly iterate on their product based on real market feedback.
Adaptation
Since the market they operate in is constantly evolving, successful startups must be able to adapt to changes quickly. Flexibility and agility are therefore essential characteristics, which make the difference between those who succeed and those who fail. Successful startups are those that manage to Pivot (change strategy, business model or product) when it is necessary to do so based on market dynamics, which must always be kept an eye on. In the book “The Lean Startup”, Eric Ries argues that adaptability is one of the most important keys to reducing the risk of failure of a startup.
Continuous innovation
Innovation must always be at the center of a successful startup’s operations. It means, therefore, that it is not enough to launch an initial innovative product, but they must continue to improve and adapt it. A startup should always be looking for innovative ways to do things, at all levels. The corporate culture must be one of innovation, and must permeate the entire organization, also involving employees.
Management of Financial Resources
Financial resource management is another key characteristic that distinguishes successful startups. Startups often find themselves operating with limited resources, and managing them wisely really makes the difference. You need to be able to attract investments, manage cash flows, plan the budget and allocate resources. Forbes says strong financial management is what allows startups to overcome initial challenges.
Conclusions
As we have seen, successful startups share a number of characteristics that seem to make the difference between succeeding and failing. If the team of founders manages to integrate and manage all these characteristics well, in the face of a well-studied product, it is very likely that the startup will position itself well in the competitive and constantly evolving market.