Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about
the top reasons why startups succeed. After interviewing hundreds of founders on the DealMakers
Podcast, where I’ve seen many, many, many of them building billion-dollar companies
in literally less than five years, there are certain patterns that I have seen that I would
like to share with you today. With that being said, let’s get into it!
The first reason why startups succeed is capital. As a founder and CEO of the business, your
biggest responsibility is literally to make sure that there’s always money in the bank.
One of the biggest reasons I would say over 65% of the companies that fail is because
they run out of money. So, with that being said, you want to always make sure that there’s
money in the bank, that you’re raising company, and that you’re able to continue to fuel
the growth of the business during every single phase on the lifecycle of the business.
Money is not just about money itself. You need to have active investors. You need to
turn it around and think about the money also as networks because essentially, you want
people that they give you the money, and they have networks that you can leverage for either
perhaps recruiting, for additional investment, for distribution like partnerships.
So, think about money as networks that you can leverage to achieve your milestones faster
and in a more effective way. And again, make sure that you’re never running out of it
because this is one of the reasons that really gets startups to succeed. The other thing
is, depending on your industry, having more money and having more marketing money that
you can spend gives you the possibility to have and create more brand awareness and to
crush your competitors. Another reason why startups succeed is, without
a doubt, the founding team. Having a strong founding team, when there is what is called
Founder Fit, that means that you have people that are complementing each other and people
that have the right type of skill sets in order to deliver that solution that is covering
that gap that is in the market. As Jim Collins said: At the end of the day, a startup is
a bus without a direction, and if you have the right people seated on the right seats
of the bus, you’re going to find that direction toward success.
This is not about grabbing people that you get along with and that you have fun having
a beer with, or maybe your family member. This is all about having people that complement
you – people that have weaknesses where you have the strengths, or where you turn
around, and where they have these strengths where you have your weaknesses. There needs
to be that complementary relationship so that you can cover all the holes and make things
happen. The next thing is having great advisors. Let’s
face it. Surrounding yourself by the right people is critical. Either it’s advisors
for the marketing, for internal processes, for recruiting, or raising more money, you
need the right people guiding you, helping you, and those are people that have done it
before. In my opinion, the best advisors are those
entrepreneurs that have done an exit, that have done the full cycle of building, financing,
and exiting their business and that have gone through that journey before and that can help
you because, at the end of the day, history repeats. It’s not about reinventing the
wheel; it’s about something that they’ve done where they were successful and applying
it to your own story. So, those advisors are great, and you can compensate them with equity
so that they’re incentivized to help you in building this with you.
The next thing is product/market fit. Product/market fit is critical. What product/market fit means
is that you’ve nailed it on what the market wants, and you are not able to keep up with
demand. The product of the service is literally flying off the shelves, and you cannot keep
up with the shelves. In this regard, the only way in which you
get there is by really understanding what your customer needs and wants. This is only
going to be done by testing a lot, by listening a lot, and doing a lot of qualitative analysis
and quantitative analysis, where you’re either doing surveys or getting with people
on the phone to have conversations. Those companies that are super successful are those
that hit it on the product/market fit. The next thing is making great hires. At the
end, it’s all about the team. It’s all about that team that is aligned, that is super
excited about really getting that culture right, that vision, and that mission right.
This is not about recruiting followers, people that you need to micromanage, people that
you need to stay on top of, so they deliver. This is about recruiting leaders, people that
can just be there with you, behind the trenches, in the battlefield. Those companies that succeed
are the ones that create an amazing environment where all these people that are leaders can
come in and thrive and grow in parallel with the growth as well of the company.
Next is the company culture. There has to be an incredible alignment and understanding
as to where the company is going. What is that future that you’re creating? Are people
excited about that future? Do they have a sense of ownership in that culture and in
that future that you’re also painting? Do they see themselves in that future? That’s
the alignment that you want. When you get the culture right, magic things happen.
Those companies that really, really end up being super successful, they are super crazy
about culture, and they were very careful when they did the hiring of the first 10-15
employees because those are going to be the ones that are going to establish that culture,
even though the culture at the beginning is established by the founders, themselves.
Next is they refuse to quit. That persistence, that being constant, and just falling and
getting back up no matter what, and reflecting, learning, and continuing to run toward that
goal is something that you see left and right on those companies that were super successful
because entrepreneurship is not a straight line. You’re always going to have the ups
and the downs, and again, whenever you have a down, you get back up, you figure it out,
you reflect from what didn’t work, and then you try to make sure that you get it right
the next time. With that being said, I would love to hear
on the comment section below other things that you’ve seen that work for startups
in their success, or perhaps what’s working for you. Also, Like this video and subscribe
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all over the world, and I think that you would find tremendous value in it. Thank you so
much for watching.