Most startups fail. The majority will never be heard of. They are bust and out of business before anyone knows their name, or will have seen them enough to remember them. Even of those who do get traction in customers and raising money, many will fail. What is it that separates the top 10% that really make it, make it big and stay up there?
They Put Customers First
A look at the biggest startup success stories reveals companies who led with putting customers first. It’s how companies like Metro PCS managed to grow and get acquired by T-Mobile. It’s how Uber and Airbnb managed to scale and change the laws, despite effectively being illegal when they started. It’s how Jon Stein managed to launch Betterment during a major financial crisis and has grown to managing $15B (listen to the full episode on the DealMakers Podcast here).
They Solve Real Problems & Pains
In order to have a viable startup entrepreneurs must be solving a real problem. Not just a problem that the entrepreneur perceives, but which is a real pain point that they target customer is struggling with right now, and has a sense of urgency about fixing. One that they are willing to pay money for.
If you’re not sure, try selling it. Ask what people don’t like about your idea and all the reasons it could fail. Use that data to make it better and to re-risk your startup.
They Stay Hungry
Hunger is what drives entrepreneurs to stay passionate, keep hustling and to really make an effort. This hunger is not only essential to force you off your behind and into the game, but to keep growing and to stay a brand leader at the top.
There have been plenty of great ideas that entrepreneurs slept on, until someone else ran with it. There have been many big companies that once led their industries, only to collapse miserably by getting lazy.
Do what you have to do in order to stay hungry. For some that may need to be as extreme as moving to Silicon Valley and living out of a car to get started. For others it may be sleeping in the office for years like some of the top founders I’ve interviewed on the DealMakers Podcast. David Klein as an example lived in his office for years before he raised billions in funding (listen to the full episode here).
It may be getting out in the field on a regular basis to keep your passion for the customer alive. Even if you can afford to sit insulated in the corner office and have everything you ever need delivered to your Manhattan condo.
They Learn to Manage Money Well
They don’t teach basic financial principles in school. Few graduate in accounting and then become startup founders. Yet, one of the very top causes of business failure is money management. If you want to stay alive, raise money, and really get anywhere with your venture you’ve got to at least hire someone who is very good at the numbers and record keeping.
Part of this as well is knowing when and how to raise capital by mastering story telling and having everything captured in 10 to 15 slides. Below you can download the free pitch deck template that has been used to raise millions.
They Scale Big
Scale isn’t just an end goal. Scale itself, and the process of constantly scaling has many benefits of its own. Top startup successes may not be the best at everything. They may even have terrible products, and worse customer service, but they know how to scale, and they scale big and fast.
They are Always Testing
Testing means trying things that may fail. Things that may even be big PR messes. Facebook, Netflix, Google, you name them, they test. They fail. They tweak.
Once you stop testing and experimenting, it won’t be long before someone else innovates, disrupts and surpasses you.
They Prize Great Advice
They highly value great advice and help. That can come in the form of mentors, consultants, staff, board members, investors, even peers. It can be coaching, board meetings, podcasts, and like most successful leaders making it a part of their morning routine or something they always be before bed at night.
Look at the top startups. Many of their names are now synonymous with their advisors and financial backers.
They Learn How to Use the Media
Great startups learn how to use the press. They don’t really need a dedicated PR person or company in their early years. They do find ways to make noise about their product and company, their fundraising achievements and advisors they bring on board. They stay visible.
They Hire Great Teams
From cofounders to executives to those in the trenches and advisers, they seek to hire the best. If you’re going to build a top 10% startup, you’ve got to have a top 10% team. The best in fundraising, product development, operations, marketing, and so on.
It’s not as easy as it looks to build an amazing startup that makes it and lasts. Fortunately, by focusing on the right things, and following the clues of success, entrepreneurs can greatly increase their ability to survive and thrive, and create excellent startups.
If you are in the process of fundraising use the pitch deck template below that already has been used by founders to raise millions.