We all know that entrepreneurship is tough, but the harsh reality is that most new businesses fail within the first year of launch. In “6 Secrets to Startup Success“, author John Bradberry explores the reasons why there’s such a massive gap between the high levels of desire of entrepreneurship to what entrepreneurs actually achieve, and looks at lessons on how to improve their chances of success. Bradberry, an entrepreneur, consultant, and investor, conducted a study in 2007 to look for these reasons and discovers a surprising answer – that the very passion driving these founders can also be the very thing that derails them.
Despite the name, it’s actually quite difficult to pin down exactly what the six “secrets to startup success” are. In fact, it looks more like eight secrets, rather than six, gems that will benefit both the seasoned and aspiring entrepreneur.
I’ll take a stab at summarizing his points into six “secrets”:
Identifying your passion, and how to avoid the passion trap.
Too many founders fall so much in love with their ideas that they fall into the ‘passion trap’ – a “self-reinforcing spiral of beliefs, choices, and actions that lead to critical miscalculations and missteps”. After all, it’s one thing to know where your passion lies; it’s quite another to have that passion dictate your decisions to the point of irrationality.
The most fundamental factor that determines a startup’s success is, not surprisingly, the founder. Bradberry gets you to take an honest look at yourself and see if you have ‘founder readiness’, or the”the principle of bringing your absolute best to your entrepreneurial effort, finding the best fit between your goals and capabilities and the needs of your new venture”.
Knowing how to orient to the market.
Attach yourself to your customer, and not to your idea. A strong market orientation, Bradberry insists, will “immunize you against one of the most dangerous effects of the passion trap: your blind faith that customers will believe in your product simply because you do”.
Learning to chart a path to breakeven and beyond.
Just as branding requires you to tell a story to consumers about the soul of your business, there’s also a need to develop a clear and compelling ‘math story’. A ‘math story’ is one which clearly articulates your startup’s business model and strategy, outlining your profitability and growth, as well as ensuring there’s enough financing for a sufficient runway towards financial survival and growth.
Agility in execution.
As the famous Prussian militarist Carl von Clausewitz once declared, “No plan survives contact with the enemy”. Similarly, no amount of planning will compensate for the unexpected twists and turns that reality will bring to a startup. The key challenge, therefore, is knowing how to iterate your business when required.
Having staying power.
Like a long-distance runner, a startup needs to build the stamina to persevere over time. The truth of the matter is that success won’t come as easily as expected, which means that your profitability projections are likely to fall short. Bradberry looks at strategies to strengthen and lengthening your runway: – 1) launching close to the customer, 2) addressing your biggest risks early, 3) raising more money than you think you will need, and 4) committing resources wisely.
Bradberry also weaves the success and failure stories of various small businesses – a care center, a software company, and a financial mortgage company, amongst others – into the book, which lends a certain realism and poignancy that should hit home the lessons that he espouses. The book can sometimes make for difficult reading – editing to arrange ideas and concepts for better flow would help – but the lessons encapsulated within are those which any entrepreneur, young or old, can benefit from.
If you like “6 Secrets to Startup Success“, you may also want to check out Elizabeth Edwards’ Startup: The Complete Handbook for Launching a Company for Less (reviewed here).