In entrepreneurship, innovation is everything, and market disruption the pinnacle of startup success. But you don’t have to reinvent the wheel on everything—and you shouldn’t. A few factors have an outsize effect on a startup’s potential; focus on those first. Then you can follow the trail blazed by other startups to increase your likelihood of success. Smart startups leverage existing knowledge and improvise when needed.
In this multi-part blog series, we’ll first define those elements that influence your odds of entrepreneurial success; next, we’ll outline the formula or steps that we’ve seen successful startups follow; and then we’ll unpack the details and expand on the how-tos in later posts.
Five Elements of STARTUP Success
So let’s start with a mental model of those known elements that determine startup success. The quality of each of these has tremendous impact on your outcomes:
- Vision: the alpha and omega of any startup
- Talent: the team pushing that vision forward
- Network: the mentors, customers, and contacts who provide access to resources and expand your opportunities
- Capital: the fuel for growth, particularly fast growth in the tech sector
- Feedback: the input from your network that helps your vision attain product-market fit
As a startup grows from the germ of an idea into a viable enterprise, each element comes into play in an iterative cycle of compounding impact. If any elements are weak, your startup will struggle until you address those weaknesses. We’ll go into each of these factors in depth in future posts.
The Formula
What we’ve seen at The Mill is that successful startups invest time and energy in following certain strategic steps in the early stages. We call it a formula for startup success, but remember: formulas have variables, and you are the biggest variable. Work the formula, work the variables.
Those caveats aside, these are the steps in the formula we’ve seen work in the Velocities region of southern Indiana where we’re located, but they’re adaptable to other areas.
- Bring domain expertise and market insight
- Become a member of The Mill
- Go through a pre-accelerator
- Apply for SBIR/STTR
- Work with the Entrepreneur in Residence
We’ll go deeper into each of these in later posts, but here’s an overview of why these steps matter and how they relate to those known ingredients in startup success.
Step 1: Bring domain expertise and market insight
A great startup starts with a really good idea, and the most viable ideas are born from deep domain expertise that has produced a fresh insight into the market. This insight lies at the heart of your vision, but it’s not enough on its own. Your vision is only as good as your ability to communicate it in ways that motivate your team, investors, and customers. Your vision will likely morph with feedback and experience, but it needs to be compelling at every stage. If you don’t bring domain or market expertise, you have a huge blind spot; find a cofounder who does.
Step 2: Become a member of The Mill
Your first investment in your vision should be in building your network. It’s important to be around like-minded people so that you can brainstorm, get feedback and different perspectives, get new ideas, find team members and cofounders, grow your talent pool, and expand your connections. Here in southern Indiana, as a nonprofit center for entrepreneurship and coworking, The Mill gives members entrée into the startup ecosystem, access to essential resources and advice, and an inspiring, creative workspace that gets your mojo going.
Step 3: Go through a pre-accelerator
A pre-accelerator is important for three reasons. First, you’ll be forced to hone your pitch: to learn how to communicate your vision in messaging that resonates with investors and customers. Pitching also forces you to really think through your product or service and build out the roadmap so that your story makes sense and brings in capital. Second, pre-accelerators connect you to mentors with insight, experience, and connections. Don’t even think of going it alone. The most successful startups get coaching, in the form of a mentor, a business coach, a peer advisory group, or a formal board of advisors. And third, a pre-accelerator connects you to a broader network of peers, contacts, and resources you’ll need long after the program ends. For our most successful startups, going through gBETA’s pre-accelerator was key.
Step 4: Apply for SBIR/STTR funds
SBIR and STTR funds are federal grants from the government specifically designed for startups to do research. The government wants you to do research, wants it to be successful, and wants you to commercialize it. Grant money is non-dilutive, which means you don’t have to give equity in your company in return. Instead, you get this money in exchange for fulfilling literally whatever requirements you set for yourself in the application form. Research the industry, the market niche, your customers, the technology, whatever you can.
The SBIR program bills itself as the largest seed fund in America, and they’re right. Every startup can and should apply: period.
Step 5: Work with the Entrepreneur-in-Residence
Here at The Mill, the Entrepreneur-in-Residence is what we call Cy Megnin, the full-time mentor to the Velocities region. He brings extensive experience in startups and is expert at helping you build your company, walking you through the basics and the fine points, gently nudging you in the right direction, providing customized coaching, and connecting you to resources that can help your startup’s specific problems.
We know, we keep talking about mentoring! That’s because it’s really, really important. When you meet with a mentor regularly, you get into a cadence and start making more progress than you would on your own. We’ve seen a lot of startups who thought they didn’t need coaching or brushed off expert feedback; those were not the startups who succeeded.
We’ll go deeper into these topics in following posts, but for now, think on this:
Of the five elements (vision, talent, networking, capital, feedback) of startup success, which are strengths and weaknesses for you?
What should be your next step? Who can advise you on that?