In January 2020, just as COVID-19 was starting to hit the news, I had the idea for what would soon be my sixth startup, PlexiCam. I wasn’t alone. In 2020, the US tax authorities received 4.4 million applications for new businesses.
What many of those new entrepreneurs will soon learn is that ideas are simple, but execution infinitely more difficult. Therefore, two thirds of the 4.4. million new companies will go bankrupt within two years.
Why do so many startups fill up so quickly? According to San Francisco-based startup studio Wilbur Labs, if you ask that question to founders whose startups failed, their top two answers will be that they ran out of money or couldn’t get funding.
While you obviously need a finance runway and solid financial controls to run any business, great startups rarely fail because they lack funding. The reason so many founders disagree is because few will admit that they just couldn’t run it.
I’ve built and worked with companies that were funded with little money and others with a blank check. The challenges of turning a new idea into a business are enormous in both cases. If anything, deep pockets can just as often prolong the inevitable demise of a really bad idea.
Even with a great idea, startups are never easy. They shouldn’t be. If what you do is new, if it addresses an unresolved problem, or if it paves the way for a new product, it will also present unexpected challenges.
The things most important for a startup to meet those challenges are also the things most easily ignored in the euphoria of a new idea. So, assuming your idea is good, here are five of the key cornerstones I’ve found in the most successful startups.
1. Find a great partner.
Remember that your partner is someone you’ll be on your hips with 24/7/365 for the next five to ten years.
Startups run empty. They take every ounce of energy you have to give and then some. And they always take longer than you expected. Without a partner to share the burden, you will quickly feel exhausted and overwhelmed. There is no formula for a great business partnership, but I like to use the metaphor of a kite and a string. Great partnerships balance lofty ambitions with practical grounding.
2. Protect your intellectual property.
Trademarks and patents are validation for you, the market and investors. Yet I regularly come across founders who hardly have any idea how both work. Become familiar with trademark and patent law. Yes, at some point you need lawyers, but you can do a lot yourself.
In my experience, IP protection has been absolutely critical to realizing long-term value. Please note that patents will not prevent infringement. Instead, they give you the right to enforce the novelty of your idea. If your idea is successful, it will be copied. Be ready for that.
3. Be prepared to turn.
I haven’t seen a startup, be it a digital, physical, or service business, that hasn’t been radically reshaped by the market, often to the point where it barely resembles its original form. Your market and your customers are the only ones who can ultimately decide if what you have is worth it. As a result, everything you put on the market takes on a new shape. If not, you’d better take the blinders off quickly.
Pivot points are difficult for founders, but they are essential. Seventy-five percent of all startup founders attribute their success to a pivot. A pivot can be just as important to your business model as it is to your product.
4. Digital marketing takes patience.
One of the greatest and least understood assets your startup has is digital marketing. Unfortunately, most startups think this is synonymous with search engine optimization or SEO. Digital marketing involves a lengthy effort of training search and social algorithms to recognize your social posts, investing in social media advertising, and constantly analyzing results.
Start small, but stick with it. As with patents and trademarks, you’re just lazy if you don’t spend time educating yourself on this.
5. Customer satisfaction is your only product.
The biggest distinguishing point you have as a startup isn’t your product, it’s customer service. Treat all customer communications and support as if it were your only product. Take every little bit of feedback, criticism, frustration and praise from customers and prospects and acknowledge it with gratitude and respect.
Respond instantly and quickly to every single customer communication. The moment you become defensive with a customer, you close the door to the most important contributor to innovation. Obviously there’s a lot more to a startup’s long-term success, but with these cornerstones you’ve laid a foundation that gives you the best chance of facing the many unforeseen challenges your startup faces. offer.
The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.
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