At the Entrepreneur & Small Business Forum (ESBF) event covering the launch strategies of successful startups, organizer Bruce Crawford explained that a lot of things need to go right for a startup to succeed. “The critical time period for most is the year leading up to the launch and the initial two years of operation. There are no consensus figures, but the survival rate of startups is at best 50%.” Crawford is also the managing director of Angen Advisors, a consulting firm which recognizes a high portion of startup firms fail because they run out of money before they have sufficiently established a market presence.
Panelists talked about some of the traits and attributes of successful founders, their teams and their companies. So what does that team need? A core set of functional skills such as technology and some kind of market or sales knowledge expertise that is particularly relevant to the space that they’re pursuing. It also must have people prepared to disrupt the normal course of their industry.
Panelist Thatcher Bell, managing director at Gotham Ventures, believes that domain knowledge is one of the necessary ingredients. “So you have someone who knows how to build what you’re going to build, you’ve got to have someone that knows the customer that you’re trying to build it for, and you need to have someone ideally who can sell it, even just to start with.
“You need to have very clear roles to the extent you can — from the beginning –and you need to have very clear seniority. So one thing that I see a lot of, particularly in the teams that include friends, is you’ll get cards or the website will say some kind of title that implies no kind of seniority. Or worse yet, it will say partner or managing partner and they all say the same thing. Pardon my French, but that’s bullshit. The buck stops with someone and it has to be clear who that is from the beginning. And that someone is one person, and that person is the CEO. And anything else scares the hell out of me as an investor and as a co-founder should scare the hell out of you.”
The second panelist, Andrew Boer, founded a startup that became Amazon Payments. Currently he is president of MovableMedia, a content marketing agency that focuses on providing custom content with a pre-existing audience. He believes that a major attribute for success is disruption – in people, ideas, content and technology. He uses the traditional bland corporate blog as an example of something that could be disrupted.
“Our idea is simple — we recruit authors who have existing followings and bring them to brands. Why this works is that many times brands are trying to find publishers to create their own content. But they can’t cut through the noise and make sure the brands that they’re bringing have an audience for their content. This is because they’re all creating blogs but they rarely find an audience for them and no one cares.
“What we’ve done from a technology standpoint that is disruptive is that we’ve moved away from the idea of paying writers by the word. We pay writers partially for the time that they spend but partially for the audience that they bring to the content. Which, if you think about it, is how we’ve always valued music or books or anything else. We pay authors by how many books get read, not for creating the book. We don’t pay musicians by the note. We pay them when they create a song that people want to hear. And so, when you take that approach, you recruit these authors and pay them partially for the audience. They become much more engaged.”
The third panelist, Tristan Louis, is a pioneer in internet development and a serial entrepreneur who has founded six startups – two of which went public and two of which were sold. Currently he is founder and CEO of the startup Keepskor, the platform which enables brand marketers to create complex computer games for mobile devices and social networks without new code. Basically it provides the platform that allows anyone to create games without trying to seek for encodes. It also provides advertisers with a way to create branded dates.
So what are some attributes of successful startups? “Money and greed,” said Louis. “At the end of the day it comes down to the ability to chew glass. Willingness to taste your own blood and keep going at it until you figure out the right answer. I do it on the daily basis. It’s like startups go from low to the high roads. One minute you celebrate the day having setup with the customer around the venture or hired a fantastic employee — something along those lines — and the next minute it’s down to the disaster or an employee is not aligning up with the others. It affects you from any direction. You can go back and forth between those two kinds of emotions, pretty much on the daily basis.”