(STL.News) Startups seem to be everywhere these days. A sort of buzzword attributed to a company that’s in its first stages of operation, startups are companies that are founded by one or more entrepreneurs looking to fill a demand in the market. As Michael Arrington, founder of TechCrunch, puts it, “The best startups generally come from somebody needing to scratch an itch.”
Startups tend to start off with limited revenue and high costs and usually require investments from venture capitalists before becoming self-sustaining entities.
More and more people are venturing out on their own and forming their own businesses, but doing so is no easy prospect. There are so many aspects of creating a startup that it can be easy to get lost in it all. To figure out the best way to be successful, we reached out to business leaders who had been there before to hear what they had to say.
Passion is Key
“I can’t imagine doing this if I didn’t have passion,” says Jacques-Edouard Sabatier, Co-Founder, and CEO of JOW, a food-delivery startup. “If I didn’t truly believe that my company would help families spend more time with their loved ones, then I think I would have given up very early on.”
Most people that decide to venture out on their own and create a startup do it because they have a firm belief in their idea. As with all things in life, if you can’t get behind your idea one hundred percent, you are going to slowly lose interest and stop giving the effort needed to make it work.
Have a Plan
“You should always have a plan when you are starting to form your own business,” says Rym Selmi, Founder of MiiRO, a plant-based food company. “You can’t just go in blind. That is a surefire path to failure. Be as specific as possible with your concept and how you are going to accomplish your goals. You need to know how everything will operate and be structured; how the business will operate and sustain growth. Be intricate and know the industry you are in inside and out.”
You have likely seen people get destroyed on Shark Tank for not being able to answer the Shark’s questions; it’s the same principle. You need to have a plan that is all-encompassing so that you can attract new investors and keep the ones you already have.
It helps to know your competition, too, and understand how your product or service is going to fulfill the needs that others cannot.
Know Your Core Brand Pillars
“Make sure your core brand pillars are completely and concretely defined and everything you do – and say – aligns with them. These pillars should focus on your (1) overarching company ethos, (2) future/ultimate brand mission, and (3) values that each and every employee should abide by. When everything is clearly defined, you can create a roadmap for success, recruit top-tier talent more easily, and set up new hires for success right from the start,” says Tommy Chang, Head of Marketing at Homelister, a new way to sell your home online.
Your brand pillars should be one of the first things you define as you begin to hire and expand. These pillars and concepts may be clear to you as the business leader, but if they are not clear to your employees, you risk losing direction. Go a step further by making these public-facing so customers can see what your company is all about when making purchasing decisions.
“Don’t try to take on all the responsibility all the time. You are only one person, and you can’t be an expert at everything it takes to make your business succeed. It might take many different people to start your business,” says Benjamin Smith, Founder of Disco, skincare for men company. “I can’t simultaneously be a lawyer, a financial expert, and a marketer. I need to be able to delegate and share the responsibility of running a company. If I spread myself too thin, I am more likely to make mistakes. Better to share responsibility with people I trust while I oversee everything at a high level.”
“Always keep like-minded people close to you,” says Jake Jorgovan, founder and CEO of Lead Cookie. You will need people around you that will give you much-needed feedback. Many entrepreneurs try to wear too many hats, which is natural when trying to protect your creative vision. But spreading yourself too thin is also a surefire way to burnout, which in turn will be detrimental to your business in the long run.
Piggybacking on sharing responsibility, making the right hires is also key to your startup’s success. “You need to hire the right people early on to set yourself up for the long-term. Outsource if you have to, just make sure you get the best talent in the door early,” says Adam Reed, CEO of Crown & Paw, a pet self-portrait service.
There are many ways to hire when starting out, and people will differ on the best tactics. “We hired based on the workplace fit, but some of my friends in the industry opted for people who had the right skills. It can really go either way. Only you know what is best for your business,” Reed continued.
No matter how well prepared you think you may be, there is always going to be something that throws a wrench in your plans that you need to budget for. “Unexpected expenses need to be expected when you are starting out. Early on, we didn’t budget for a marketing automation strategy, and we paid the price. The market just changes so quickly, and you need to be ready for those types of things. Understand that curveballs are going to be thrown your way and always have some money set aside for when they come ” says Chris Cronin, Co-founding partner at Kitanica.
Having a budget in place is obvious when starting a business, but planning for the unexpected can be overlooked. Make sure that your startup takes some of its seed money and stashes it away for a rainy day. You never know when something like a global pandemic will hit, and you will need to pivot.
“When covid happened, we had to be ready to reinvest in different parts of our business. It was something no one was ready for. But, lucky for us, we budgeted for such and knew we had a stash we could dig into when the going got tough,” added George Fraguio, Vice President of Bridge Lending at Vaster, an online mortgage company.
Customer Relationships Are Everything
Matt Seaburn, Partner and President at Rent A Wheel, advises, “Your relationship with your customers is truly everything when you are in the startup phase. You need to have a CRM that allows you to maintain specifics on your customers and use that data to chat with them and get their feedback. This type of relationship-building is crucial and can literally make or break you early on.”
Turn to your customers for constructive criticism, and let them help guide you as you grow. Their feedback will help decision-making and offer structure. “They [customers] will be vocal about what they want. You just have to listen.”
Money Should Be Secondary
Startups that see long-term success are the ones who innovate from the jump and listen to the market’s needs. Trust your instincts, and you will see an ROI, but don’t expect it to happen right away.
“If you have it in your head that this is going to get you rich quick, you should get out now. It is going to be a while before you see a return on your investment, and you have to be willing to wait. If you care about your product and believe in it, the money will come,” says Summer Romasco, Brand Strategist and Marketing Director at Burner.
Have a Niche
“If you want to be an innovator, you need to look for a niche in the market,” says William Schumacher, Founder, and CEO of Uprising Food, a health food company. “Whatever it is you come up with, it needs to be an improvement over what is currently out there. You need to be super specific in what it is you are trying to provide, as counterintuitive as that might sound.”
You can expand your offerings once you have carved out your niche, but if you do not define yourself early on, you won’t be able to expand down the line. If it helps, look at a large market and see where you can improve it. Is there a service you use every day that could use a certain functionality that doesn’t exist yet? That’s a perfect opportunity for you to jump in and create a solution. If you want to see something fixed, chances are other people do too.