During the past decade, the world has witnessed growth of global startups facing serious threats from lack of longevity plans. Many startups that mushroomed during the mid-2000s disappeared overnight due to the lack of a “long-range vision.” Although these upstarts dared to disrupt and demolish the old order of business, they completely ignored the traditional values of preservation and sustainability.
Longevity should always be the primary concern of a burgeoning business, without which success will just be a passing fad. In the startup world, very few business ventures survive beyond incubation or early-stage development. How can the startup culture that rarely allows businesses to survive beyond the early stages of growth and development buck the trend?
Startups That Survive the Early-Stage Development
Startups that prevail beyond the early-stage growth generally recognize that profit is necessary for sustainability, but they:
- Design products and services based on daily challenges faced by ordinary consumers. For example, a healthcare app, a business tracking tool, a financial advisory service, a 24/7 task reminder app, and so on.
- Focus on long-term, value creation without losing sight of profit margins. The extended services that each startup usually offers are designed to retain customers for the long haul and generate new business through customer-feedback marketing.
- Experiment with and continuously reshape business models with a mission to serve the customers and not just sell. Countless startup businesses like grocery or food-delivery apps go beyond just selling products and services to fulfill the customer needs of online order services, online payment services, and home-delivery services. These are real value-added services that customers have come to expect in an advanced tech-enabled human society.
The Importance of a Strong Leadership
The founders of a startup drive the mission and vision of the company, which is why strong-willed and decisive mindsets will make good leadership candidates for startups. During the early stage of development, it is this core team of leaders that makes the financial and funding decisions, the technology choices, the products and services design decisions, and other strategic decisions for moving forward. Thus, it is imperative for these leaders to have:
- Innovative mindsets with a natural flair to read the market pulse
- The best contacts in their sector
- Insider links to academic talents for product research and development
- Access to the best capital funding channels
Lessons to be Learnt From Survivors of the Startup Boom
Startups that succeeded utilized the following attributes:
They devised lasting strategies for adapting to change in technology, regulations, and market needs. An ongoing effort to adapt and implement new technologies, relevant laws, and market policies to fulfill the broader objectives of business through solid partnerships or collaborations with other businesses is a must.
They were less focused on quick wealth creation and more on sustainability. The focus of startups should not be just quick profits but delivering value-added products and services to human society.
Here are the typical traits of successful startup leaders:
- Innately humble and willing to listen to others
- Positive mindset and willingness to take ownership of decisions and actions
- Great salesmen with the right combination of confidence and pose
- Focused on their goals and are decisive
- Flexible enough to see challenges ahead and quickly adapt to changes
Good startup leaders have to be visionaries while keeping a focus on day-to-day operations. They never lose track of details – be it business objectives, long-term strategies, product design, service development, or customer engagement. Walt Disney led the masses with his “dream.” He had such an influential and charismatic personality that he transformed his entertainment world into a globally renowned brand and a highly profitable business. He was the pioneer in the edutainment business.
In the startup world, it is not enough to just create good products and services for fulfilling particular consumer needs for profits. Startups generally go beyond wealth creation, which the old-world businesses have only recently understood through corporate social responsibility (CSR). Understanding value creation for human society was always a business priority for startups.
Through their business mission & vision, they generally serve the poor and downtrodden sections of the society, focus on the underserved population, rely on eco-friendly business processes, and believe in humanistic methods of profit generation. They often innovate recycling strategies, cost-effective production methods, and technology-enabled practices to keep their businesses lean and efficient and make a social impact.
By implementing the aforementioned goals, successful startups increased the odds of long-term sustainability without sacrificing short-term growth objectives.
Three Startups That Survived the COVID-19 Pandemic
Let’s see how these three startups located at three different corners of the world survived the recent pandemic:
Abacus Financial Business Management
Belva Anakwenze, owner of the LA based Abacus Financial Business Management, has taken one month at a time to help her niche financial advisory business survive COVID-19 by:
- Providing advanced-technology enabled, remote financial advisory services to entertainment world clients
- Patiently accepting the shrinking profit margins as most of her entertainment industry clients were hit hard during the crisis
- Conducting client meetings on her driveway after maintaining the social distancing norms
- Allowing her employees to work remotely through the wee hours of day and night as needed
- Paying rent on an office space that she has not used for months but still hoping her business will turn around soon
- Taking a small loan from the federal Paycheck Protection Program
A pan-India grocery retailer was hit hard in March of 2020 when their supply-chain network suddenly faced a crisis and the majority of their delivery staff could not report to work because local trains and buses were not running. So, what did Big Basket do to turn around their lost business? Here’s something to learn from their redesigned business model:
- They adjusted their web and mobile platforms to reduce the long waiting queues for online orders just to give all customers a fair chance. Specific times of the day narrowed down the order windows to adequately mitigate the problem of reduced delivery staff.
- Big Basket started partnering with cab-service aggregators and food-delivery services to deliver groceries in metros and other cities.
- Big Basket did not stop delivering groceries, they just increased the grocery-delivery time to keep their business running and customers satisfied.
- They introduced a host of other useful services, operational now, to win back their customers’ faith.
Here’s a story of real inspiration. In the pandemic-ridden year, when a series of events like global lockdown and closure of airports brought the international travel industry to its knees, here is one unusual travel startup that braved the recession and refused to back down. This startup not only survived but raised funds and generated revenues.
If you ever get a chance to talk to Amsterdam-based Bidroom’s CEO Michael Ros, you will know that some extraordinary business leaders like Ros reinvented their travel-tourism services business models to survive the year-long crisis.
Michael Ros took the following bold steps to save his travel startup from succumbing to the global recession in the travel industry:
- Ross added 49,000 hotels to his membership-based travel-booking platform.
- Bidroom also witnessed the addition of 40 business partners to better serve the hotels and travelers.
- This startup enabled remote workforce arrangements with an expanded IT team.
- They hosted eight online events with industry professionals from all over the globe.
- Bidroom introduced many value-added services to offer their clients a truly holistic tourism experience.
- When businesses the world over were busy downsizing, this company went ahead and expanded their product offerings and staff capacity.
- In 2021, Bidroom’s top business priority will be traveler safety, which they plan to implement through innovative product and service enhancements like travel insurance.
The large-scale failure or disappearance of the startup boom of the mid-2000s has signaled an era of drastic changes in business practices and long-range business planning. The startups of the present decade are much more conservative and cautious in their business plans. For starters, most modern businesses have clearly charted out Exit Plans. Startups have a lot to learn from traditional, resilient businesses like American Express or Microsoft that know how to adapt to change.