All of us have a fair idea that startups play an integral part in the world’s economics, but here is a fun fact – 90% of startups FAIL!
To fail is not a crime; to not know the reason why you failed is definitely one. Instead of looking at the failures, let’s look at the minorities of startups that have made it.
After analysing many startups and also being the founder of one, I realised that what successful startups have in common is their sincerity and passion for creating a sustainable version of their startup.
Sustainability is a word more thrown around global climate change, but not so much when it comes to the realm of startups. Startups are dying faster than ever, it’s probably because they never planned to live long enough in the first place.
Your startup is your baby, it is your hard work, it is your vision. If you are putting so much of yourself in making your dreams come to reality, why not make that reality sustainable for the present and the future.
If you are onboard with the idea of seeing your startup having a long and healthy life – here are 5 ways of making your startups more sustainable.
Think about sustainability from the get go
Sustainability is not an add-on, it is a belief which needs to be moulded into a startup vision. Many entrepreneurs give relevance to sustainability only when they have successfully scaled; little do they know just how short lasting they have become.
Adopting sustainability right from the start establishes your entire culture, approach and environment, and how you see your startup moving forward. And to infuse this concept in an already established culture can be harmful.
It’s a paradigm shift which can be catastrophic for your startup. To make sudden changes to your startup in the name of sustainability doesn’t guarantee much of anything. This is probably the reason why entrepreneurs scorn with the concept of sustainability.
One of the cornerstones of incorporating sustainability in your startup is through reducing time spent on daily tasks.
Over the course of the startup evolution, time has become a crucial indicator of whether a startup is going to remain sustainable or not. Saving time on carrying daily tasks makes a huge difference.
‘Time is money’ and to have this principle infused into your startup culture right from the beginning can truly define the sustainability quotient of your startup. Apply this principle effectively in real life by using various methodologies and tools which can help you maximise your efficiency on a daily basis.
For example, generic startups lose their productive time on team communications. Complicated email forwards and long tiresome email threads consume a lot of valuable team and company time. A sustainable startup will make an effort to put the focus on using collaborative communication to save time and avoid inbox clutter.
Sustainable startups optimise their collaborative communication by using shared labels – where emails in Gmail labels are synced across all team member accounts within seconds. To add a step further in enabling efficient communication, team members can collaborate instantly.
Stop obsessing over becoming a unicorn
Startups often forget that their primary goal is not becoming a $1 billion valued conglomerate but having a positive cash flow. In fact, 29% of startups fail because they run out of money.
If your startup’s business model is not growth but acquiring funds and getting a higher market valuation, self-dependency goes out of the window as there is a strong reliance on VCs and other investors.
A good round of funding should encourage you to be more cautious and take things slowly in order to map out strategies to sustain your startup. But, with the urge to flaunt your unicorn badge, you scale up quickly without giving any attention to your cash flow.
To kill this obsession and create an opportunity wherein you can become a unicorn, start small. Pay attention to the microeconomics of your startup, each unit of your business – from employees to cash flows, make sure everything is managed well. And once you get the funding, you can easily scale and look at the macro of things along with meshing them with well-managed micro units.
Adapt and change
Many entrepreneurs will agree that sometimes what’s written on paper and what actually happens in the market are incomparable.
Your startup needs to be prepared for such irregularities by keeping your product flexible to change and adapt to the market. It is the flexibility which will help you recover from problems that otherwise would have discouraged you to scale further.
Make more room for customers’ feedback in your overall strategy – they help you get real insights into the performance of your product. This way you will be able to regularly update and modify your product features.
While doing this, make sure that you don’t overuse your resources. Overconsumption adds to your operational overheads. Your startup needs to create a healthy inverse relation between resources and revenue.
Here’s an example of how Drift understood that the moment you see a customer feedback scale rapidly, you need to work on that feedback. Drift received customer suggestions to enable audience targeting based on geography and thus created a ‘Geo-Targeting’ feature.
Go for lean
The mantra that most lean startups follow – less wastage, faster results!
The aim of a lean startup is to guide – how to maneuver and change in order to reduce waste and grow your business by achieving results quickly. This brings a certain kind of order in the chaotic realm of your startup.
Lean startups encourage working smarter, not harder. Poor planning and working on the product prototype for years can lead to lost opportunities – it is better to be proactive.
Remember: The longer it takes to develop, the less likely it is to launch.
Create a product that customers want now – it’s all about the ‘now.’ When your product generates early demand, it’s easier to launch in the market and start generating cash flow.
Communicate your sustainability goals to your team
Making your startup more sustainable is not a one man job. It requires every member of your team to understand what the sustainability goals are.
When everyone is well versed with the goals, there is a gradual tendency for team members to start working together proactively to achieve those goals. This would require you to create an efficient communication channel where teams are constantly kept in the loop.
Communicating a bigger picture of sustainability is very important to avoid friction among team members and bring everyone on the same page.
Say, after months of hard work, your product team creates a new feature that they can’t stop raving about, but your customers don’t share the same enthusiasm and you have to pull the plug on their project. Before doing that, it’s very important to communicate to your product team why this feature is being shut to ensure they understand the underlying reasons and continue working on product enhancements.
Sustainability is not an option, it’s a necessity for every startup irrespective of where it is in the lifecycle. You have to make sure that the concept of sustainability is drilled down to the very seed of your startup vision.
Entrepreneurs need to give more weight to sustainability as much as they do to suitability. There is no point in investing your resources to only last a short time.
Scaling your startup quickly and overcommitting resources is prohibitive to long-term success. Your commitment to embedding sustainability into the company culture will put you in the league of that special 10% of startups that succeed.
Niraj is the founder of Hiver (hiverhq.com), an app that turns Gmail into a powerful customer support and collaboration tool. When not working at Hiver on programming or customer support, Niraj likes to play guitar. Niraj can be reached on Twitter @nirajr.