Launching into entrepreneurship is an exercise in rocket flight.
You must learn how to build a craft that will take you into the stratosphere, and you don’t actually start until after you lift off from the pad. Inevitably, aviation is ruled by gravity — and so is the trajectory of your venture. The harder gravity pulls, the more difficult it is to figure out how to grow your startup and reach exit velocity.
A booster that can prove most effective is venture capital. VC funding can be a key success factor for startups, although it has recently taken a dive. Perhaps now more than ever, successful startups are the ones that learn to generate lift on their own to maximize any boost they gain from outside investors.
Some experts are saying that this economic downturn could yield favorable conditions for startups. Famed startup accelerator Y Combinator saw a 15% to 20% increase in applicants for its summer program, for instance, and layoffs elsewhere in the business environment have prodded entrepreneurial hopefuls into pursuing passion projects.
Even under current circumstances, it’s clear that many startups are making their first launch attempt. What happens next is a matter of energetic physics: In other words, action and reaction.
The Most Successful Startups’ Flight Tips
As an entrepreneur, part of your role is to figure out the best aerodynamic design for your startup based on how different forces add resistance to your plan. If sales cycles are long, for instance, your propellant won’t take you as far. If customer retention drops, your startup’s fuel sputters away and adds turbulence to your trajectory. If hard-won customers have minimal impact on your revenue, you’ll need more boosters to stay in the air.
For most successful startups, these are a few essential strategies that can help generate lift where they need it the most — to counteract gravity before it pulls them back down to the ground.
1. Position to become an industry’s central data hub
In certain cases, startups succeed because they make themselves invaluable to their industry from the outset. Successful startups can accelerate many times faster than the market’s average growth when they follow this flight path.
Consider Google’s travel feature, which became the central data hub for pricing information for most travel industry consumers. Similarly, startups can position themselves as the go-to source for customers seeking critical information about their respective industries.
2. Design your startup to adapt on the fly
Disruption is part of the game for every industry, and successful startups stay in the air because they adapt effectively to the changing market. You’ll need flaps that can adjust your direction when you need to, a crew that can adjust to new flight plans, and the right metrics on your dashboard to know whether a change in direction is necessary.
Case in point: The COVID-19 crisis has significantly disrupted every industry, and what makes a successful startup now certainly isn’t the same as it was a year ago. Successful startups might start off providing one service but should be prepared to quickly retool or switch destinations to fulfill perhaps a different — yet much more pressing — need in their industry.
3. Prime the sales crew for flight with customer-centric processes
By designing efficient processes around how customers make decisions, you can set your sales team up for success. Put yourself in your customers’ shoes and map out the process by which decisions are made, whether that’s by committee, CEO signoff, or delegated authority. Then, implement an effective system of procedures and maps that align your company with the steps in that process. That way, new members of your sales team can get up to speed quickly and start to generate valuable lift.
What Makes a Successful Startup?
With the right tactics, engineering, and strategy, most successful startups can be designed, built, and launched with right-sized boosts of outside capital.
Arbol, an Ascend portfolio company that provides a platform leveraging high-quality data to protect farmers from weather risk, is a great example of maximizing internal lift upon launch. Before shipping its marketplace, Arbol partnered with a leading insurance agency to afford a broad reach across the industry from day one. The results have been something to behold: In fewer than four months, Arbol’s marketplace sailed past $11 million in assets placed under coverage and $2 million in premium revenues.
Every new business’s trajectory will look different. But with some careful planning about the path ahead, you can increase your chances of defying gravity for longer. How will your startup’s plan and strategy ensure self-sustaining flight?
Image by SpaceX