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When you launch a startup, the odds are stacked against you. Statistics show that your chances of making it beyond the first year are only 1 in 10 regardless of your industry. So, how do you increase your odds of success? One thing you can do is get involved with a business accelerator.
“For entrepreneurs, having the skills and the experience is not always enough to take advantage of an opportunity; they often still need help. That’s where an accelerator comes in,” explains Andrew Ryan, CEO of Newchip Accelerator.
Benefitting from business accelerators
You can think of a business accelerator as a graduate-level class on launching a successful startup. To get in, you must go through an application process that assesses your business’s current status and future potential. If accepted, prepare to engage in a curriculum that teaches the best practices on everything from product development to raising a successful round of financing. In addition, accelerators allow participants to connect with and learn from a network of advisors, mentors and investors.
Newchip was founded in 2018 by a group of veteran entrepreneurs with a vision for expanding the boundaries of the venture ecosystem. Rather than setting up shop in the traditional hubs of San Francisco or New York, Newchip was established online, providing remote access and positioning itself to serve a global audience. In four years, it has worked with more than 2,500 companies in more than 250 cities spread throughout more than 120 countries.
While the COVID-19 pandemic has inspired many to shift from employee to entrepreneur, it has also caused issues — like ongoing supply chain snafus — that have made launching startups more difficult than ever. Andrews believes that accelerators are even more important to startups as they attempt to navigate the impacts of the pandemic.
“Startup success depends more than ever on a focused and centralized vision,” explains Ryan, “one that leverages decentralized business divisions that can adapt, move, and innovate through strong leadership and independence. When the economy and business landscape are unstable, adaptability is crucial. Businesses that know how to pivot are more likely to beat the odds and become part of the one percent of startups that succeed.”
Improving adaptability by increasing flexibility
Opting for a flexible workforce is one thing that can help startups to achieve the adaptability that Ryan believes is so important. For instance, choosing contractors over full-time employees provides flexibility when it comes to both managing projects and managing financial resources.
“Utilizing contractors instead of hiring full-time employees gives a startup better leverage for keeping finances — as well as projects — under control,” explains Jay Jung, founder and managing partner at Embarc Advisors. “While the hourly fee may be higher for a contractor than a staff employee, they save businesses money when it comes to benefits and taxes. Working with contractors also makes it easier to scale workloads either up or down, depending on how the startup progresses. High fixed costs can lock a startup to a particular course of action. Flexibility comes at a premium, but provides greater adaptability.”
When it comes to succeeding as a startup, the importance of properly managing finances cannot be overstated. Failures in this area are regularly cited as one of the top reasons that small businesses and startups fail.
Placing a priority on customer perception
Startup success does not depend solely on developing a valuable product or service; it requires that the product or service finds a market. Often, the biggest hurdle between product development and product sales is managing customer perception.
Sam Rabinowitz, CEO and cofounder of Drivyn, experienced the importance of customer perception when he launched his online training platform aimed at Tesla drivers.
“One of the hurdles that we had to overcome when we started Drivyn was the fact that it was perceived as a driving course, which isn’t something that is customary for adults to engage with,” Rabinowitz explains. “We needed to find an effective way to communicate that we are not a driving school, but rather a platform that helps people learn how to use their vehicle to its fullest.”
Effectively marketing a product, especially when it comes to startups, often involves reframing the market’s perception of what it needs and why it needs it.
“Our goal is to reframe Teslas so that they are seen as a new technology that truly deserves the proper instruction, rather than a standard car that any adult should know how to drive,” Rabinowitz explains. “Once we do that, our platform can be perceived as a valuable tool for any Tesla driver.”
Staying focused on customer needs
Startups that participate in the Newchip Accelerator program learn that staying focused on customers’ needs is one of the keys to achieving success.
“If you’re not building a product that users absolutely love, then why are you even building it?” Ryan asks. “More importantly, why are you trying to build a business out of that product? As a startup, you don’t have the luxury of building anything less than amazing, let alone something that doesn’t address a real problem or need.”
His advice rings true regardless of a startup’s target market. Being passionate about the mission behind your business is important not just for attracting customers, but also for attracting investors.
“Meeting a customer’s need often means providing a product or service that empowers them to accomplish something more efficiently without learning new skills,” explains Nick Donarski, founder of ORE System. “Every customer is looking for something that makes them better at what they do. Companies that can provide that type of product will have no trouble finding fans.”
ORE System is a blockchain solutions provider that empowers simplified integration for application and game developers. Its ORE Software Development Toolkit allows game studios and developers to increase the quality of their products and the speed of development without requiring them to become blockchain engineers first.
For Ecosense, the customer need that it chose to focus on was peace of mind. Its radon monitoring solutions help to ensure its customers that they are safe from the deadly effects of radon gas, which is the leading cause of lung cancer among non-smokers.
“We made a commitment to continually seek new ways to provide residents, families, and businesses with solutions that improve their health and quality of living,” says Insoo Park, CEO of Ecosense. “Our award-winning products reflect that commitment, providing a level of safety that is 15 times better than the industry standard. Any startup that both meets customers’ needs and exceeds their expectations will increase its odds of success.”
Most startup founders understand that there is nothing that will guarantee success. Still, there is much that can be done to increase the odds. Whether it involves drawing upon the resources provided by an accelerator or obtaining the necessary wisdom and skills in some other way, there are steps that can be taken to move any business closer to becoming one of the one percent of startups that succeed.