Success secrets of profitable start-ups
I always dreamt about becoming an entrepreneur like millions of youth. The lifestyle of entrepreneurs always attracts me , the freedom to do as per wish, giving employment to talented people, discussing the market strategies, and responding accordingly. To fulfill my dreams I tried entrepreneurship many times and sometimes I got success and sometimes the opportunity to learn. Then I realize that it is the right time to study the success ingredients of start-ups at large.
Why start-ups- “start-ups have the potential to solve world problems like employment, pollution, equity, etc.”
For my study, my definition of start-ups was “Start-ups are high growth, innovative and high-risk enterprises.”
I decided to find the role of the following ingredients in the success of any start-ups 1. Strategy 2. Finance 3. Marketing 4. Promoters 5. Human Resources 6. Technology 7. Competitor’s 8.Macro factors
In this series, I will publish each factor in detail weekly. First I decided to write about the role of strategy in the success of any start-ups.
I decided to study the role of strategy in the success of any start-up. For this, I studied more than 30 start-ups randomly with information available in public space. Some of them are traditional start-ups like running a brick and mortar automobile sale ventures and some are from modern technology-based start-ups like automobile aggregation and offering features, discounts at a glance. During my study, I find that shockingly around 20% do not have any well-defined strategy but 80% have their well-defined responsive strategy.
Why start-ups needed different strategies?
One entrepreneur answered, “Business start-up strategies differ from those of an existing business because start-up businesses have obstacles to overcome that existing business may not necessarily face. All of these business start-up strategies help create a vision and direction for your company.”
To become successful in any business strategy is needed. In most cases for any successful start-ups, there is a well through strategy.
“Fail to plan is a plan to fail.”
There are three types of strategies for the success of start-ups 1. Proactive 2. Reactive 3. Need-based
Based on your risk appetite, market potential, and skillset, decide the strategy.
I am sharing highly successful five steps to prepare a strategy for any start-ups
- Decide the growth potential based on market demand (total market potential)
- Analyze competition in the market
- Do SWOT analysis
- Prepare strategy A-high growth, moderate risk, focus on your strength, Strategy B- Moderate growth, low risk, focus on competitor weakness
- Test A & B -which suits you go for that.
For success- testing and time improvement is key.
One serial entrepreneur told me the role of strategy “The first step towards building a smart growth strategy is understanding your startup’s value proposition. The value proposition should explain how your start-ups are uniquely qualified to meet or exceed customers’ expectations”.
To get the process of strategy formation I summarize the whole discussion
Some tips for getting your start-up’s expansion strategy in place are-
- Understand your total available market and target market
- Analyze the Competition.
- Identifying a Value Proposition
- Establishing Long-Term Goals for your Start-up
- Picking a Location With Growth Potential
- Building a Start-up motivated Team
- Develop a realistic Growth Plan
- Be original, do not copy
- Keep a long term horizon
- Competition- collaborate or compete?
- The disruption strategy
There is four basic growth strategy for any start-ups. The growth stage comes after the inception stage. During the inception, stage priority should be on legal structure, team, and technology and build the minimum viable product (MVP).
Market penetration, Product development, Market expansion, and diversification.
In my next post, I will write about the role of finance in the success of any start-up.
