Characteristics of start-ups that succeed

90% of start-ups will fail. This is a hard truth. Statistics like these are not intended to discourage entrepreneurs, but instead to encourage them to work smarter.

So, how to be in the 10% then? What are the characteristics of start-ups that succeed? There are plenty of characteristics of successful start-ups. Our goal is not to list them all here, but rather to point-out some of the most significant causes of success.

1. The product is perfect for the market.

A survey from Fortune determined that “lack of a market need for their product” as the single biggest reason (42%) of start-ups failure.

If you are going to spend your time making a product/service, then spend your time making sure it is the right product for the right market.

2. The entrepreneur does not ignore anything.

A good product/service idea and a strong technical team are not a guarantee of a sustainable business.

One shall not overlook the key aspects of business process and the “boring stuff.” The CEO thinks, “It’s my job to lead.” The CMO thinks, “It’s my job to market.” The lead developer thinks, “It’s my job to code.” But a start-up can not segment its responsibilities like that. Things are far more organic in a startup, meaning that roles and responsibilities will overlap. Some of the most important components of a startup are those pesky issues of business process, business model, and scalability.

Successful entrepreneurs understand that they must work ON their business, and not IN their business. Do It Yourself does not work as well in business as it works in assembling furniture. Obviously, one of the primary reasons for doing things ourselves is saving money. Another reason is that we feel we can do it much faster and better than anyone else. But understand: this is not helpful to your business. As an entrepreneur, you are supposed to captain the ship and steer it to new heights. If you start to work on the execution bit yourself, there will be no one to navigate it in the right direction. As a business owner, if you are signing-off for anything except marketing and innovation, then there is a problem.

Also, getting caught up in the minutiae of presentations, phone calls, meetings, and emails can distract the entrepreneur from the heart of the business. You need focus. There are only two key elements to any business: acquiring customers and acquiring talent. If you can autopilot both of them, your company will be in “organic growth.”

3. The company grows fast.

Growth, fast growth, is what entrepreneurs crave, investors need, and markets want. Rapid growth is the sign of a great idea in a hot market.

A startup should not be satisfied with marginal single-digit growth rates after many months of operating. If the growth doesn’t happen after a certain amount of time, then the growth will not happen. A company that is not growing is shrinking.

The second major reason why startups fail is that they “ran out of cash.” Why did they run out of cash? Because they didn’t grow fast enough. Growing fast effectively bypass some of the biggest startup killers i.e losing to the competition, losing customers, and losing passion.

Rapid growth early-on is a sure sign of future success.

4. The team knows how to recover.

Every startup is backed by a team of people. The more versatile that team, the better chance they have of succeeding.

“Versatility” is often viewed in a limited sense, that of possessing more than one skill or talent. Versatility in the startup environment involves much more than someone’s skillset. It involves mindset. Startup teams must possess the ability to change products, take up a new marketing approach, re-brand the business, or even tear down a business and start all over again.

Also, startups with co-founders have a higher success rate than companies with a single founder. Having a co-founder creates a partnership. There is much more accountability, which helps you to avoid some of the pitfalls of a single charismatic leader. Plus, a co-founder will have skills that you don’t have.

In summary, start-ups succeeding have a product that meets a need, they do not ignore anything, they grow fast, and they recover from the hard-knock startup life.

What characteristics have YOU noticed about the start-ups that succeed?