This video emphasizes the importance of securing capital to ensure a startup's survival and growth, highlighting that money also represents valuable.
This video emphasizes the importance of securing capital to ensure a startup's survival and growth, highlighting that money also represents valuable networks for leveraging milestones.
Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about the top reasons why startups succeed. After interviewing hundreds of founders on the DealMakers Podcast, where I’ve seen many, many, many of them building billion-dollar companies in literally less than five years, there are certain patterns that I have seen that I would like to share with you today. With that being said, let’s get into it! The first reason why startups succeed is capital. As a founder and CEO of the business, your biggest responsibility is literally to make sure that there’s always money in the bank. One of the biggest reasons I would say over 65% of the companies that fail is because they run out of money. So, with that being said, you want to always make sure that there’s money in the bank, that you’re raising company, and that you’re able to continue to fuel the growth of the
business during every single phase on the lifecycle of the business. Money is not just about money itself. You need to have active investors. You need to turn it around and think about the money also as networks because essentially, you want people that they give you the money, and they have networks that you can leverage for either perhaps recruiting, for additional investment, for distribution like partnerships. So, think about money as networks that you can leverage to achieve your milestones faster and in a more effective way. And again, make sure that you’re never running out of it because this is one of the reasons that really gets startups to succeed. The other thing is, depending on your industry, having more money and having more marketing money that you can spend gives you the possibility to have and create more brand awareness and to crush your competitors. Another reason why
startups succeed is, without a doubt, the founding team. Having a strong founding team, when there is what is called Founder Fit, that means that you have people that are complementing each other and people that have the right type of skill sets in order to deliver that solution that is covering that gap that is in the market. As Jim Collins said: At the end of the day, a startup is a bus without a direction, and if you have the right people seated on the right seats of the bus, you’re going to find that direction toward success. This is not about grabbing people that you get along with and that you have fun having a beer with, or maybe your family member. This is all about having people that complement you – people that have weaknesses where you have the strengths, or where you turn around, and where they have these strengths where you have your weaknesses. There needs to be that
complementary relationship so that you can cover all the holes and make things happen. The next thing is having great advisors. Let’s face it. Surrounding yourself by the right people is critical. Either it’s advisors for the marketing, for internal processes, for recruiting, or raising more money, you need the right people guiding you, helping you, and those are people that have done it before. In my opinion, the best advisors are those entrepreneurs that have done an exit, that have done the full cycle of building, financing, and exiting their business and that have gone through that journey before and that can help you because, at the end of the day, history repeats. It’s not about reinventing the wheel; it’s about something that they’ve done where they were successful and applying it to your own story. So, those advisors are great, and you can compensate them with equity so that
they’re incentivized to help you in building this with you. The next thing is product/market fit. Product/market fit is critical. What product/market fit means is that you’ve nailed it on what the market wants, and you are not able to keep up with demand. The product of the service is literally flying off the shelves, and you cannot keep up with the shelves. In this regard, the only way in which you get there is by really understanding what your customer needs and wants. This is only going to be done by testing a lot, by listening a lot, and doing a lot of qualitative analysis and quantitative analysis, where you’re either doing surveys or getting with people on the phone to have conversations. Those companies that are super successful are those that hit it on the product/market fit. The next thing is making great hires. At the end, it’s all about the team. It’s all about that team that
is aligned, that is super excited about really getting that culture right, that vision, and that mission right. This is not about recruiting followers, people that you need to micromanage, people that you need to stay on top of, so they deliver. This is about recruiting leaders, people that can just be there with you, behind the trenches, in the battlefield. Those companies that succeed are the ones that create an amazing environment where all these people that are leaders can come in and thrive and grow in parallel with the growth as well of the company. Next is the company culture. There has to be an incredible alignment and understanding as to where the company is going. What is that future that you’re creating? Are people excited about that future? Do they have a sense of ownership in that culture and in that future that you’re also painting? Do they see themselves in that future?
That’s the alignment that you want. When you get the culture right, magic things happen. Those companies that really, really end up being super successful, they are super crazy about culture, and they were very careful when they did the hiring of the first 10-15 employees because those are going to be the ones that are going to establish that culture, even though the culture at the beginning is established by the founders, themselves. Next is they refuse to quit. That persistence, that being constant, and just falling and getting back up no matter what, and reflecting, learning, and continuing to run toward that goal is something that you see left and right on those companies that were super successful because entrepreneurship is not a straight line. You’re always going to have the ups and the downs, and again, whenever you have a down, you get back up, you figure it out, you reflect
from what didn’t work, and then you try to make sure that you get it right the next time. With that being said, I would love to hear on the comment section below other things that you’ve seen that work for startups in their success, or perhaps what’s working for you. Also, Like this video and subscribe to the channel so that you don’t miss out on all the videos that we’re rolling out every week. Then, check out the fundraising training, which is the program where we help founders from A all the way to Z with everything related to fundraising, live Q&As, templates, agreements, a community of founders helping each other all over the world, and I think that you would find tremendous value in it. Thank you so much for watching.