Very often, startup life is glamourized as a world of open-plan offices and international networking events.
However, the reality is often very different – only 10% of startups succeed, and this is down to a variety of reasons including bankruptcies, disagreements with business partners, and a simple lack of coping methods.
Inga Stasiulonytė is a former Olympic athlete and the founder of Ofounders – a mind training startup, which applies Olympic methods of sports psychology, neuroscience, and Inga’s experience as a professional sportsperson to assist startup founders who are seeking to overcome personal and work-based challenges in order to succeed in their business endeavours.
She has previously advised a number of successful ventures including technology startups, MIT Entrepreneurship Bootcamps, and professional athletes. She says that more often than not, the words “doubt, despair, exhaustion, anxiety, hunger, jealousy, insomnia, poverty, pain, and fear” are the words that the startup founders she advises use to describe their experience.
However, she believes that “healthy pressure” along with applying the “correct pivots, and adjustments” she developed at OFounders can help startup founders avoid joining the 90% of startups that fail.
Here are 10 tips from Inga on how to prevent startup failure.
Maximising minimal resources
One of the biggest issues that startup founders encounter is finding the right resources and having to learn fast. Usually, in a non-startup workplace, employees specialise in one area. Yet when founding a startup, founders will need to know everything because there is not the time or resources to hire experts – therefore, they will need to work on developing their knowledge in all areas of running a business, including HR, PR, taxation, law, team management, and customer support. As a way of coping with this challenge, the key is to ask for help from the right people, but be self-motivated to fill the knowledge gaps in these fields.
Team and people skills
Another major trial for startup founders is effectively managing everyone from employees to clients. In order for a business to succeed, they will need to manage varying personalities to effectively transfer their ideas and visions with their team, investors, clients, and everyone else associated with the startup. In terms of the team at the startup, it is important that they are able to pivot and adapt to various situations given the challenges that are often thrown up in the period after a startup's creation. According to Inga “it's not about talent – it's about how eager they are to learn, grow, and develop.”
Growing a startup is hectic – there is too little time to get things done, there are issues amongst the team and investors, and things are generally not going as smoothly as expected. Factor in the founder's inventive mind, and everything combined becomes a recipe for losing focus and becoming distracted. Using the philosophy of “you do you”, Dr. Wasim Mohideed – founder of TechMed Health Care – gave the following piece of advice: “Don’t let the short term fires distract you. Don’t get panicked at looking at how others are doing or compare your journey with theirs. Stay focused on your path, at your own pace, and with your agenda. The road is long. There is a place for everyone’s success.”
Startups cost money, and more often than not, founders put all of their life savings into their business creation. However, with their financial security gone, they lose their personal safety net, which drives them into entering negotiations that are less than lucrative – in short, Inga believes that it is “impossible to build a stable startup if there is everything to lose.” Instead, it is worth spending two to six months before closing a round of investments. It is also important to find investors who will help guide the startup in its growth, and return to when other rounds of funding are needed to be raised.
Product or service validation
A major issue for a startup is to figure out the right market for its product. In short, if it doesn't work with a target client base, then there will be no future for the startup. Very often, founders underestimate the complexities of sales and marketing. This means that no matter how good their product looks, there will be no sales if nobody knows about it. This problem often stems from a lack of thorough research about their clients and establishing a solid customer core. According to Tomasso Troiani, the founder of Swabit, “spend more time speaking with users who adopted your product or service from its first steps – then you will not have the chance to fall in love with your creation that is not working.”
Establishing a solid work-life balance
Inga says that one of the most-heard complaints from startup founders is that the more success they achieve, the bigger the expectations, pressures, and responsibilities. The downtime time they intended to spend on resting and enjoying their personal lives is now used to tackle even bigger startup demands. Whilst being busy is seen as a status symbol in startup culture, family and the self should not come at the expense of this. Instead of being constantly glued to a phone or a computer, a successful startup founder will structure their day accordingly, take care of their mental and physical health, sleep for at least seven hours, have time off, and indulge in a hobby.
A lack of making compromises is an often cited problem and leads to the startup founder feeling misunderstood, rejected, and constantly challenged. Given many a startup is underpinned by a dream, founders feel unwilling to compromise their plans and give up on what they started. However, a lack of flexibility translates to the lack of a wider vision, which can lead to a lack of investment and opportunities – industries change over the years, and a company and its founders need to think about and explore incoming trends to remain relevant.
Part of startup life – especially in its early stages – is full of unknowns and uncertainties. It may be tempting to stick with “tried and tested” methods to keep a business ticking over in a relatively stable manner, but adopting a curious attitude drives creativity. This leads to more options in terms of strategy, investors, product development, and being flexible in the face of challenges.
Positive PR and credibility building
According to Inga, startup culture is entrenched with the “fake it until you make it” mentality, meaning that there is a tendency to give the impression of knowing everything. However, these knowledge gaps are eventually highlighted when it comes to dealing with investors, employees, and others related to the startup. The startup and the founder's reputation will suffer as a result. Similarly, it is important for founders to present themselves by carrying out small actions such as not being late, calling when scheduled, and responding quickly to an email. Both the founder and the startup will receive a credibility boost as a result.
Startup culture is a competitive one as founders compete for investments, talents, clients and customers. Even if the startup isn't working out as planned, success stories of “who raised how much money” often put founders under social pressure from the team, family, friends, and investors to pretend that everything is fine. As a result, it can prove hard to pivot away from a strategy that is not working. However, pretending everything is fine can lead to mental and physical health complications, as well as the ultimate failure of a startup due to the founders' inability to pivot. Similarly, by spending money on expensive nights out and conferences to simply ‘keep up' with competitors, the startup is also likely to run into severe financial issues and possible bankruptcy.