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Assessing Growth Disconnects: Why 90 Percent Of Startups Fail

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by Helen Yu, author of “Ascend Your Start-Up: Conquer the 5 Disconnects to Accelerate Growth

There are different stages to scaling up your business, not unlike the camps you pass through as you climb a mountain. But in the start-up world, that path up the mountain is a minefield, and no matter how prepared you are, you will always run into unexpected situations. Certain things will always be out of your control, like a key employee leaving the team, a global pandemic, or a sudden shift in consumer buying behavior.

Unfortunately, you cannot stay safe in base camp forever. Instead, you must move forward, digging in your heels for the treacherous, slippery journey of taking your product to market. This is the difficult territory where 90 percent of start-ups fail.

So how do you prepare for the unexpected and avoid the common strategy-to-execution disconnects that stand as an obstacle between where you are and where you want to be? The key is not just early identification of potential problems but also ensuring that accountability and alignment are part of your company’s core values.

Determining the Right Market for Your Product

One of the most basic ways to identify disconnects early on is to truly understand your company’s product and how it fits into the marketplace.

“Fall in love with a problem, not a specific solution,” says Laura Javier, a product designer at Instagram and Facebook. This critical decision is where you need to do some serious research as to whether the problem you are trying to solve has an impact on certain types of businesses, how big the addressable market is, and who else is already doing it. When you dive into the problem, you explore the impact you are making with your product.

Does the category where you have placed your product already exist? Is that product category innovative and relevant to the current market environment? Are you solving a problem that everyone in that particular category cares about? The gap that is left when a product is in the wrong category is a massive disconnect for start-ups because they are so internally focused on product development.

Instead of looking only at your own product, look up. See the next focal point on your journey and keep climbing toward not just building your product but creating a whole new category in the industry. In order to create a category or become a leader in an existing category, you need to understand the market, customer segmentation, competitive landscape, distribution channels, and market trends, as well as how and where your solution fits in.

Setting the Stage for Repeated Success

If you build your product without first gaining a broader view, you could find yourself off course. As you shift from volume to value, start formulating common product requirements, common messaging, common positioning, standardized customer on-boarding process and delivery, setting the stage for repeatable success.  This process helps you define and overcome the Minimum Viable Repeatability Disconnect.

Here, you’re not focused merely on features and functionalities of your product, you’re diving into the use case for that product and positioning your product as a well-defined and relevant customer solution that ultimately will become a common set of product requirements that make your product more marketable and scalable.

In order to make your company — and your product — truly customer-centric, you must develop a viable product roadmap. Instead of getting caught up in metrics and schema, you need to focus on your product strategy: your value proposition for the company and your brand identity. Product differentiation is critical, and the best way to test your product vision is to partner with a customer. After you test and confirm your product strategy with a customer use case and segmentation, you can then confidently align that strategy through execution.

What It Means to Be Truly Customer-centric

True customer-centricity focuses not only on your direct customer, but also on your customer’s customer. When your customers rely on your solution to scale and grow, you become an essential solution provider and have a much higher chance of creating not just a customer but a brand evangelist. This is when customers expand their footprint with you, and you can accelerate growth through both upselling and cross-selling. Take the steps to keep the customers of your customer driving success.

As you explore your start-up through the lens of your customer, you will constantly revalidate and align your strategy with your execution plan. Listening to the voice of customers means solving the Customer Voice Disconnect. Customers will tell you what they want. Your ability to hear them and dig deeper to understand what their words really mean will set you apart from your competition.

A Strong Process Makes Success Repeatable and Dependable

Accountability and alignment are the two traits that set top-performing companies apart from the rest. While most companies understand the importance of aligning strategy with execution, many are challenged to operationalize their vision due to lack of repeatable process, misaligned priorities, and lack of measurement to drive accountability.

Accountability and alignment will let your company not only experience success but also systemize and sustain it by establishing processes to make results repeatable and dependable. You can gauge how high you plan to ascend with specific business goals along the way, with clear processes to achieve your goals and the success criteria to measure them.

Measuring Your Overall Strategy

Misalignment of priorities will occur unless you set up a few common metrics that drive cross-functional accountability. Setting up OKRs (Objectives and Key Results) at the company level is an effective way to conquer Process and Measurement Disconnect.

For example, if driving customer satisfaction is one of your OKRs at the company level, each department can come up with department-specific OKRs to achieve that goal. Your HR team would be measured by talent retention rate while the customer success team would be measured by customer retention rate, and the engineering team would be measured by how quickly a product defect is resolved. The sales team would focus more on selling to the right customers where your solution can be deployed successfully. If you align each of your company’s business functions with a common OKR, you can align all your departments with your overall strategy and also better define the processes and measurements that ensure your start-up’s continued success.

How You Handle Disconnects Will Make or Break Your Start-up

You build from the ground up — not just your product but also your values, mission, vision, and team. As you ascend start-up mountain, each transition between development phases is a crossroad. Crossroads connect each evolution of the founder journey. If you’ve fully explored your disconnects, you will gain the added strength and resilience to scale faster and more fearlessly as you navigate critical crossroads.

Mountain climbing is, in effect, a series of interrelated decisions and activities that lead you to the summit under high-risk conditions. Understanding potential growth disconnects and being prepared to handle the crossroads that take you higher up the mountain will help you ascend faster and more gracefully.

Helen Yu is the founder and CEO of TigonAdvisory. She drives growth for tech companies from start-ups to global titans like Oracle and Adobe, and helps CEOs achieve multibillion-dollar revenue growth and record profitability. An avid adventurer who trekked to Mt. Everest base camp and ice climbed glaciers, her new book is “Ascend Your Start-Up: Conquer the 5 Disconnects to Accelerate Growth“.