8 Crucial Elements of Startup Success

Bill Clark is the CEO of Microventures, a securities broker/dealer that uses crowdfunding to allow investors to invest between $ 1,000 and $ 10,000 in startups online. You can follow him on Twitter @austinbillc.

Most people understand that a high percentage of startups never make it. So what if you could give yourself a leg up on the competition? Below is a list of tips that may help your startup get to the next level. These ideas are not revolutionary, and many successful startups already have these qualities. Why not ensure yours does too?

1. Hire Great Coders

If you don’t have the skills to code, make sure you find someone with a solid programming background who can implement your idea. You want to make sure that person has built successful websites with features similar to your own vision. That way, you know they have the right skills for your startup. An inefficient coder will take a long time to launch the site, wasting time by making minor changes and fixing bugs. You will lose valuable time and potentially miss the opportunity to capitalize on first-to-market advantages.

2. Launch Your Product Site Quickly

Sometimes you’ll encounter a last-minute opportunity to add features to your product. However, this can delay the launch. You might consider it worth the wait, especially if the added features will further engage customers. However, make sure to launch as soon as possible with the critical functionality. You can always make later changes to improve your site and product. Furthermore, you’ll be able to start gathering valuable feedback from your customers. If you’re insecure about a hasty launch, let customers know they’re viewing the beta version of the site, and they can expect improvements soon.

3. Identify Your Users

If you’re developing a product, make sure you truly understand the needs of your end users. You might assume that potential customers are seeking your particular solution, only to discover after launch that your product might be too expensive or doesn’t precisely repair the problem. Make sure that you take some time to understand exactly what your users need, and what they are willing to pay for.

4. Don’t Target a Small Niche

Solving a problem for a targeted niche is not a bad idea — the smaller the niche, the less competition you may face. The downside is that you might not gain enough users to render a profit. Make sure to perform market research to understand the scale of consumers interested in your product. Also, plan to expand the niche once you service its need. When you evolve your original idea into adjacent markets, you will increase the probability of exponential growth.

5. Raise Enough Money the First Time

As most startups know, determining how much money to raise is difficult. Raising enough money in your seed round will carry your business through inevitable growing pains and redesigns, but it’s important to retain enough money to develop the final product your users will love. You don’t want to spend all your time convincing investors to sign that next check that will keep the company afloat. Investors would rather you spend it further developing the business and getting them a timely return on investment. You want to raise enough money initially so that you can hit a major milestone and have something to show investors.

6. Don’t Waste Money

As obvious as this one sounds, startups waste money every day. They often overspend on things that can wait until later, or on a tool that doesn’t get them the expected results. By outsourcing a variety of activities, however, startups are now becoming less expensive to launch.

One area in which startups waste money is hiring too many employees too fast. You need to make sure you can fill up the entire day of each (indispensable) employee. Early on, only hire people who add required functionality that cannot be fulfilled by current staff. You should also determine whether a person can be hired as a short-term, temporary resource (i.e. outsourcing), or whether hiring a full-time employee is the right, long-term solution. Employee salaries contribute to high overhead expenses, and should be carefully controlled at the beginning of a successful startup.

7. Have Multiple Co-Founders

A startup can be very time-consuming. Although you envisioned its concept, you may lack the required skills to launch your idea into reality. Therefore, divide the work among trusted partners with necessary skills sets, and be able to bounce ideas off each other freely.

Dave McClure states that the ideal startup has a hacker, a hustler and a designer. The hacker can code, the hustler brings in the business, and the designer architects the concept to make it appealing to a consumer or investor. You may have one or all of these skills, but often not enough time in the day to wear all of the hats. If you can’t convince a co-founder to come on board and fill a role, it may be a red flag that your idea needs tweaking.

8. All Or Nothing

We’ve all heard the saying “don’t quit your day job, kid,” but in the world of startups, any time spent focused on outside tasks is an opportunity for competitors to beat you to market. You need to focus all your time on your startup if you want it to succeed. And this may mean quitting your day job.

If you’re building a product, targeting customers, and trying to attract investors all in your spare time, you don’t have your priorities lined up. If you dedicate all your time to your startup, you will have more drive to successfully get it to market, because now your livelihood depends on it.

This list doesn’t guarantee that you will succeed, but it will give you some benchmarks to compare yourself against. Can you think of any additional characteristics that successful startups have going for them? If so, leave them in the comments.

Image courtesy of iStockphoto, RichVintage

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