If you are a new business — just starting out — you might want to keep reading. The following article excerpts from Innovation Excellence lists a few things to consider when starting or scaling up your business.
… Unlike humans, who are more likely to die in the following year as they age, businesses that survive past the first two years are less likely to die in each subsequent year. So, while 25% of new business don’t make it past year one, only 10% of the business that make it past year 5 will die off in the following year, and only 6% in the 10th year. … But here’s where you need to be cautious. Rather than try to go for broke in the early years, consider building your foundation so that you can take greater risk in outlier years when you do have the safety of an established business to fall back on.
2. You’re more likely to succeed if you’ve failed than if you’ve never tried.
… Although founders of a previously successful business have a 30% chance of success with their next venture, founders who have failed at a prior business have a 20% chance of succeeding versus an 18% chance of success for first time entrepreneurs. … Although you learn a lot from success, failure also teaches valuable lessons about what not to do….The advice? Bring someone on board, at least as an advisor, who has been there before. …
3. 95% of entrepreneurs have at least a bachelor’s degree.
We’ve idealized the role of college drop-outs as successful entrepreneurs, Bill Gates, Steve Jobs, Mark Zuckerberg, Oprah, and many others all took the back door out of college to start and grow their companies. …The odds are overwhelmingly in your favor if you stay in school and develop not only the knowledge and discipline, but also the connections that will serve you well as you go forward.
4. Scaling too fast, too soon is the number one reason most new companies fail.
Nobody ever started business thinking, “Gee, this is going to take a lot longer than I thought it would!” But it always does because the vision in your mind is always far ahead of where the market is. If it wasn’t, someone else would already have done it! Give yourself the runway and set the expectation to be patient with your dream.
5. Two founders, rather than one, significantly increases your odds of success. You will raise 30% more investment, grow your customers 3 times as fast, and will be less likely to scale too fast.
In my own experience it has been nearly universal that startups do better when they have two balanced and fully invested partners. The ability to rely on each other to share the burden, temper risks, collaborate creatively, take on specific areas of responsibility, and to motivate each other are all absolutely critical during the early stages of growth. …This is one case where 1+1 is definitely more than the sum of the parts.