Confident, creative and conscientious – these are qualities that describe a successful startup founder. But what qualities determine a successful startup?
At the Business School Innovation Hub’s October Insights into Startups panel we asked five experts to help break down the making of a successful startup:
- Cameron Barnes (Expert-in-Residence),
- Jenni Catterson (China Business Consultant),
- Tye van Dyk (KPMG Deals Advisor),
- Tom Griffin (Allens Accelerate Lawyer); and
- Matt Schiller (Gowntown and Snappr Founder).
When thinking about startups and innovation many of us look for an inspired idea that will transform the way we live – how we listen to music, connect with friends or travel. Startups have changed the way we do all of these things and have grown into companies like Apple, Facebook and Airbnb. However if you look at the trajectory of these, now industry-dominating, businesses they had more than just a great idea to secure a spot at the top.
Here are five insights from our panel discussion that will help any startup succeed:
1. The bad idea.
Telling a bad idea from a good idea is more difficult than it initially sounds. Sometimes ideas that people think are terrible right now become the future of business (e.g. Uber, Airbnb, Tesla). If you can pick one of these ideas you’re in a great place because most people and businesses only look at obviously good ideas.
2. It’s top secret.
Founders can be notoriously cagey about their ideas going to extraordinary lengths to patent their technologies, trademark their brand and gag their employees with non-disclosure agreements. Seeking wise legal counsel early on is important to take a targeted (and reasonable) approach to advancing your interests. Importantly, remember that hard work, quality execution and speedy implementation are often underappreciated routes to startup success!
3. Money? Money. Money!
One of the biggest concerns for startup founders is funding. There are two things that founders need to get right. First, don’t undervaluate your potential when seeking investment. There are many examples of founders who almost (or did) sell a share of their company at a basement bargain valuation. Second, it’s difficult to say no to funding but avoid overfunding your startup. This can result in tardy spending practices that do more harm than good in future funding rounds.
4. The product is (not?) good enough.
Startup founders sometimes overprioritse quality and underprioritise efficiency. There’s a balance to be sought and founders should keep asking whether they’ve reached a minimal viable product. Asking customers, that is, not themselves! Start user testing early on so that you get real time feedback on the development of your product/service from kind-of functional prototype to version 1.0 release. Early adopting consumers are your target and you need to find out from them whether it’s ready to buy. Don’t develop a sophisticated version 1.0 only to find out that no one wants to buy it … ever!
5. Don’t trust Hollywood!
The Silicon Valley isn’t the only place to succeed as a founder. Knowledge agglomeration effects are real from co-locating with other leading startups (at least it probably is) but founders should evaluate this decision carefully. Startup culture can be found in a number of cities around the world but this won’t neccesarily compensate for a poorly executed idea, super expensive operating costs or entering the wrong market. Pick the right market, for the right product, with the right execution.
James Meade is the Innovation Hub Manager at The University of Sydney Business School. You can contact James at email@example.com or find out more about how we promote and support startups on the Hub Website.