How to Build a Successful Startup – Examples from Big Brands
Over 305 million startups are launched every year globally. Using our calculations this means that 835,616 startups are created every day and nearly 580 startups are created every minute. So, by the time you are done reading this article, there will be an addition of 3,479 startups to the business world.
With such a high rate of startups, it’s no wonder only 10% of these businesses see their first birthday. While it is a disappointingly low rate for someone who wants to kick-start their business, you should not let this discourage you.
Over the last 15 years, I have built 7 successful startups and helped 12+ small businesses to grow and reach their full potential. Here is everything that I have learned about building a successful startup.
Top Tips to Help You Build a Successful Startup
- Trendsetters vs. Followers
For a long time, business experts focused on trendsetters. This is the reason people went for first movers’ advantage. However, when the competition is brutal, last movers’ advantage works the best. Companies utilizing the last mover’s advantage are well-informed about the market trends.
They have already learned from other brands, which helps them outshine their competitors. These companies enter the market just to add value. For instance, the US has so many different Internet service providers. While most brands focus solely on English-speaking audiences, Optimum is catering to the second largest US population – the Spanish-speaking population. They have a dedicated customer service line for Spanish speakers and offer Optimum pagar factura for online payment service.
- Budget vs. Innovation
Right from the inception of marketing, the budget was known to be the deciding factor in the success of a business. Businesses with less budget, no legacy, or no ties to tycoons would soon bleed money and exit the industry. However, things have changed since.
In the current era, we see rags-to-riches stories at every corner. Teenagers with a few pennies in their pockets are running successful brands. This is quite common in tech startups where innovative ideas end up sweeping a big investor off their feet.
One of the most popular examples is Summly, a news-summarizing app. The CEO of Summly was a 15-year-old student. The app gained a lot of attention and audience. Later, this app was sold to Yahoo for $30 million.
- Customer Centric Vs. Profit Centric
In this digital era, competition is fierce and there are alternative options for every brand, so loyalties change. Customers are always seeking better services, cheaper options, and more advanced solutions. More than 65% of customers said they switched brands because of poor service.
This indicates that unless your brand is not customer-centric, you will fail to build a loyal audience. Big brands spend billions on loyalty programs and customer retention but for small brands, this can get a little challenging.
One such example is “Milk Bar”. The brand has developed a cult following because of its different tastes, unique offerings, engaging marketing tactics, personalized services, and inclusivity. Although there are many other bakery and dessert shops, no other brand has developed such a following.
- Customer Retention vs. Awareness
We see a brand creating a lot of waves right after its launch. The investors get the whiff, they start investing, and the brand makes it to the mainstream. The sales skyrocket within the first few months but then you never see the same brand again.
This is a story on repeat within the business world. In most cases, businesses invest heavily in awareness campaigns. They get a lot of audience and first buyers. However, as the customers experience their services or use their products, they quit buying.
One of the biggest examples of this phenomenon is Juicero, the brand declared a Silicon Valley unicorn. The brand was endorsed by big names but after its instant hype, customers soon realized that it was just another overhyped, expensive juice brand with nothing special to offer.
- Idea vs. Execution
The idea might be king but execution will make all the difference. Just a few years ago, when I entered the market with my startup idea, every investor rejected me because of competition. Considering the disadvantages of the ‘Late Mover Theory’, everyone thought my startup would never see light of the day.
However, I had a much better execution plan. I was a customer before I was a business owner, which helped me understand business from the customers’ point of view. While a good idea will help you attract attention, it will also increase the likelihood of making mistakes.
For instance, Facebook became a giant in the social media industry, despite not being the first social media platform. Before Facebook, platforms like Friendster and Myspace were quite popular, but Facebook outshined its competitors by leveraging instant messaging and microblogging.
While the aforementioned tips are very helpful, keep in mind that variables in real life might affect the result. This is the reason some businesses perform excellently with the first mover’s advantage while others fail to meet the numbers. So, when planning your startup, keep the niche and other details under consideration.
