Success

3 Ways to Determine a Startup’s Success

One of the hardest parts of a startup is determining if you’ll ever find success. Entrepreneurs dream of the day their startup will turn a profit or even hit its initial milestones. Startups are the most challenging types of businesses, as they’re the ones pushing the world’s boundaries.

What makes a startup different from a typical business is the ability for rapid growth. Famous startups are known for viral growth. What many don’t realize though, is that there were hundreds, if not thousands, of hours of work put in before they hit that incredible growth mark.

For a startup to become successful, one must have an amazing product, a rock-solid team and a stellar vision for the future. Companies like Tesla that were once considered startups were conceived with all three. If you read Elon Musk’s Master Plan for Tesla, you’ll find the origins of a successful startup.

If you think your startup is on the verge of success, test your business against these three metrics to see how you’re performing:

S-curve outlook

The S-curve illustrates the stages of innovation in which you’re at. It is broken up into four stages: startup, scale, compete and transition. If your startup is at the scale stage, you should start to see some close rivals. The transition stage is crucial to the s-curve because that is where innovation happens.

Take Blockbuster and Netflix, for an example. In 2000, Blockbuster had a chance to buy Netflix (now worth $28 billion) for a mere $50 million. Blockbuster opted out because Netflix was losing money at that point. Blockbuster was hesitant to gamble, not looking ahead, and instead looking for a short-term profit rather than a disruption of the industry. No one walks into a store to rent DVDs anymore, we either rent online or stream them. Missing the transition in modes of DVD rentals is what put Blockbuster out of business.


Also on StartupNation.com: The Secret to Entrepreneurial Success


MoM growth

Month-over-month (or MoM) growth is one of the keys to determining how fast your startup is growing. This key metric is what venture capitalist investors often use to make their investment decision. If you aren’t growing your key performance indicators every month, then you’re in trouble.

Some vital month-over-month growth metrics could include users, revenue, profits or retention. The exact growth metric you should watch varies per startup, but overall, you need to be growing some aspect of your business in a positive way each and every month.

Viral arc based growth

This performance indicator reflects your startup’s trajectory for growth. A viral arc based growth tactic involves users referring other users and a strong word of mouth approach, meaning people will actively talk about their experience with your business, product or service.

Slack, a messaging app for teams, went viral because people couldn’t stop discussing their amazing experience using the platform. In under a year, the company became the fastest growing SaaS-based platform and continues to have incredible success.

While all entrepreneurs wish there was a guaranteed way to determine a startup’s success, the fact of the matter is there can’t be, as every startup has its own journey. Your startup’s vision will change over time and you’ll continually have to iterate your product. The one certainty with a startup is that the more work you put in, the better results you’ll get back.

Total
1
Shares
Previous Article
Gift card

StartupNation Gift Card Drawing: Enter Today!

Next Article
Online payments

How Your Startup Can Accept Online Payments with Ease

Related Posts
sales team strategy
Read More

The Best Investments to Improve Your Sales Team Strategy

Creating and maintaining a thriving business depends on the success of sales performance. Essentially, the effectiveness of your sales team at generating revenue is directly related to the success of your business. Keeping your sales team motivated and helping them maximize their performance can be challenging, but with the right tools and investments, you can...
Read More

WJR Business Beat: The Customer Is King (Episode 412)

On today's Business Beat, Jeff Sloan tells small businesses what they need to do to keep customers happy. Tune in below to learn more about the Raydiant survey results on what consumers want:     Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of...
MarTech
Read More

Small Businesses That Own Their MarTech Can Edge Out the Competition

Adjustments to data protection regulations and Big Tech's revamping of how applications and third-party brokers acquire data sets have upended the world of user data management and remarketing. Big Tech, GDPR, privacy browsers and different privacy compliance standards are removing the user data of billions of users from the control of third-party marketing providers that...
brand awareness
Read More

5 Ways Technology Can Improve Brand Awareness

Brand awareness is more important than ever. Without it, customers can’t differentiate between your business and the competition. As a result, whether they shop in-store or online, they may not remember your company after a purchase, even if they like the products you sell. Brand awareness is especially important for startups, which need to quickly...