In today’s tough economic times, launching a startup can be nothing short of a roller coaster ride. According to a research conducted by Shikhar Ghosh, a senior lecturer at Harvard Business School, about three-quarters of venture-backed firms in the U.S. don’t return investors’ capital. The harsh reality is that nine out of ten startups in the U.S. tend to face failure in the first two years.
Getting your startup off the ground is like embarking on a long and winding road that is filled with several unexpected surprises.
Wondering, how you can go about taking the most effective steps towards building your startup?
How about examining a few startup success stories for starters?
In a scenario, where it’s getting increasingly difficult for a startup to survive, there have been exceptional cases. They have made their mark in the current startup landscape by achieving phenomenal success. Examining their stories will help you understand the reason why certain startups succeed whereas others stagnate or fail.
Read on to find out more about some of the best startups along with one useful lesson you can take away from each of them.
From renting mattresses to building a $10 billion company, Airbnb has come a long way, but not without its share of ups and downs. The company started in 2008. But by 2009, the company was close to going bust.
The owners went through their New York City listings and realized that their website was not gaining enough traction; the fundamental reason behind this being that the pictures on their website were awful. Right after this, they replaced all the pictures on their website with high-quality photographs, which began to inspire a lot of trust from the audience. In fact, improving the pictures helped double their revenue.
Takeaway: Identify the loopholes in your product and work on them immediately. Once you fix the problem, you will be on your way to achieving the desired results.
The current times speak of pervasive connectivity and real-time communication, which is why Snapchat perfectly fits into this picture. Snapchat was the fastest growing app in 2014 and the third-most-popular social app among millennials. It was, in fact, one of the first social media companies to recognize the appeal of ephemeral posts.
The app didn’t become a success right from the beginning. The previous version of the app named Picaboo was launched in 2011 and didn’t gather much attention. However, the slow user growth didn’t deter Evan Spiegel, Snapchat’s CEO, from his expansion plans. Without wasting time, Snapchat identified what their users were looking for and quickly enhanced the app by adding new features such as Snapchat Stories as well as video functionality.
Takeaway: Taking the right step at the right time can work wonders for your startup. Identify the demand and then become a pioneer in the respective arena. More importantly, once you understand what the most coveted features are, work on them and take them up a notch as that will help you gain a strong competitive edge and develop a connection with your target audience.
Uber, a ride-sharing company, was founded in 2009 by Travis Kalanick and Garrett Camp. It stands next to Airbnb as a successful model in the current sharing economy. The app started with a simple idea of connecting riders with local drivers. Owing to the fast-growing mobile population and the rising demand of cabs, Uber launched its app at the right time.
Regarded as one of the fastest growing companies, Uber faced some serious challenges owing to the shortcuts that it took on its path towards achieving growth. The company has faced regulatory issues worldwide and even had to deal with operational risks outside the U.S. The company drew severe criticism owing to its growing tax problems. However, Uber made the necessary changes that helped it achieve huge success.
Takeaway: Try to keep your business model as simple as possible in order to avoid dealing with complex issues later. Be proactive about the scandals that could affect your organization and have a plan for how you’ll handle such issues if they arise. Most importantly, ensure to provide genuine solutions to problems that your competitors have overlooked. There are many ways to grow your business, so don’t limit yourself. Invest substantial time and effort in learning about the most profitable methods for your startup.
Founded in 2008, 2U is the first startup of its kind to offer full degree programs online at top-tier universities. Its mission is to transform higher education by bringing it online without sacrificing quality, student experience, or graduation and job placement rates. With clear success cases to date, 2U has emerged as the market leader in the rapidly-evolving education sector.
2U allows professors to easily share information with students, create interactive lessons, and provide lectures and opportunities for social interaction among students via its web-based infrastructure. These varied services are allowing 2U to lead the way as an online education startup.
Takeaway: Industry reform is always possible. All it takes is creative thinking and grit. So, don’t hesitate to come up with an out-of-the-box idea for your business.
Square has grown into a billion-plus dollar company by providing mobile merchants with a means to accept credit card payments. The company has made credit card processing more accessible to small businesses by combining an integrated payment system with a distinctive conversation-triggering piece of hardware.
Square relies on growing its user base by giving the device and the app away for free, and generates revenue with a small percentage on the transactions carried out on them. Its disruptive business model makes it easier for local sellers to connect with buyers. Moreover, it has overall made the payment process far simpler.
Takeaway: Sometimes, giving away your product for free can be the ticket to generating strong revenue. But, this is highly dependent on your business model. Also, make sure to address the most essential needs of your target audience with a system-based approach.
This Twitter-owned company was launched earlier this year. It crossed the 10-million user threshold in just four and a half months of launching the app. Periscope is a live broadcasting tool that lets users easily stream footage from their devices to followers.
Viewers can comment in real-time. The footage can also be replayed later, which sets it apart from its rival app Meerkat, where the footage disappears once the stream is over.
Takeaway: Periscope allows one to sign up using his/her Twitter credentials and further helps seamlessly connect through existing social graphs. This facet makes it highly appealing and gives it an edge over its rivals. Chances are that you may come up with an idea for your startup that’s not too different from the rest. However, by adding certain striking features to your product and offering an improved customer experience, you can do much better than your competitors.
7. Love With Food
Love With Food was founded by Aihui Ong in California. The startup helps passionate food producers grow their food business successfully by aiding them in creating brand awareness.
One had to deal with a lot of problems during the fundraising process as she was rejected by several investors. Moreover, being a solo founder made the entire process, even more, difficult for her. However, she pitched to 75 investors in a span of three months and was able to raise more amount than what was required.
Takeaway: Don’t underestimate the fundraising process. It will be long and strenuous, and will require you to be thoroughly prepared for it. More importantly, there are several ways to find investors for your startup. However, if the method you have opted for doesn’t work in your favor, then don’t give up. Make sure to try other options.
The current startup landscape may intimidate you owing to the fact that it is hyper-competitive. However, you can achieve success by bearing the essential aspects in mind. There is no specific startup success recipe. Whether it is building a brilliant business model or acquiring funds for your company, make sure to take care of all the important factors. More importantly, remember, that in order to achieve growth you will have to consider product innovation, unique acquisition channels, rigorous optimization driven by analytics, and acquire a deep understanding of your customers. The aforementioned insights will guide you towards making your startup successful and enable you to reach your goals.