There is a great deal of energy and resources being directed towards startups and fostering a startup culture in Connecticut. Startups are energizing. They attract investment capital. They use resources in order to plan, develop and launch new products and ideas. They offer the potential for creating jobs.
The downside to startups is that most of them fail.
For every great idea that becomes a thriving and growing business there are many others that don’t make it. The reasons for failure are as varied as the number of failures. However, the successful startups usually have four things in common: a clear concept, focus on relationships, value people pay for, and continued focus as growth occurs.
Clarity of concept is a clear value proposition that is easy to understand. If you are starting a business can you clearly explain your concept in less than 60 seconds? The explanation needs to communicate three things — what you do, who would buy it, and why it is valuable.
The most powerful concepts are the ones that are quickly and clearly understood. This is the power of simplicity. People easily relate, frequently saying “Why didn’t I think of that!”
Focus on relationships because no one gets there alone. The startup founder has a vision, and the vision requires people to become reality. Successful entrepreneurs align themselves with people who understand the vision and are able to contribute.
Help can manifest itself in many ways, be it capital, talent, connections, and/or guidance and advice. The most successful entrepreneurs identify, nurture and strengthen the relationships that can help them succeed. They build trust and work to identify opportunities where both parties can receive value.
Monetize what you offer by finding someone who will pay for what you offer. After all, this is what business is all about. Develop your product or service to the point that it is sellable at a profit, and then go make some money.
People know when something is right. More importantly, they know when something doesn’t feel right. Things that feel right trigger an emotional reaction, and are a strong influence on whether to buy.
When you sell your product at a profit several things happen. First, you learn from users who can tell you what works and doesn’t work. Second, you test price points to determine the perceived value for your product or service. Third, and very important, you prove to investors that your startup is more than a concept; it is a business that can make money.
Stay focused as you grow by maintaining the clarity you had as a startup. The complexity of executing on an idea and turning it into a growing enterprise does not have to be overwhelming. The stabilizing factor is the simplicity communicated in your 60-second explanation. Keep sight of what made the idea work in the first place.
Build your organization to bring the idea’s simplicity to life: Strategies focus on how the idea connects to customers; marketing messages reflect the power of the idea’s simplicity and the value the customers realize; employees get it and are passionate about it.
Lastly, realize that everything around the business will keep changing. Understand the changes and appreciate their impact. However, don’t necessarily react to each storm or strong current that may attempt to pull you off course. The founding concept was sound; keep the rudder focused on it.
Ken Cook is the co-founder of How to Who and co-author of How to WHO: Selling Personified, a book and program on building business through relationships. Learn more at www.howtowho.com.
