Failure is NOT an Inevitability for New Startups

July 15, 2019

The founder ecosystem is ramping up so fast it blows my mind. This time last year, $27.9 billion worth of venture capital was invested throughout the U.S. in the third quarter, bringing the year-to-date tally to a stunning $84 billion. And despite the many current economic and political uncertainties happening in the world right now, VC projections for the end of 2019 are even higher.

There has never been a better time for startups to get off the ground and onto a solid and successful business trajectory. Never. These are truly the most lucrative, opportunity-abundant times I can recall over the span of my career.

Part of this change is due to the “mad money” capital that’s available these days to fund a business, and also the lower-than-ever cost to launch a startup, including company basics like developing software and hosting. There are more resources within every founder’s reach, and more readily available cash flow into startup coffers than in previous decades — and founders are wiser and more experienced than before.

Even the co-working space is blowing up as startups and today’s entrepreneurs seek out “productivity space” as opposed to the old-style concept of “office space,” which comes saddled with lengthy and prohibitive corporate leases and all that unnecessary overhead and debt that can be put to better use on product development and long-term investments that help grow and sustain a business.

But despite the bounty of amazing business opportunities and the interested, captive eye of the VC community on the lookout for the next most promising and innovative million or billion-dollar company — startups entering today’s business arena are faced with a significant increase in competition and huge pressure to differentiate and find a unique marketplace position.

Launching a startup can also be a time of great stress, uncertainty, and there is no shortage of pitfalls and missteps that can trip up an otherwise promising early-stage company.

Believe me, I’ve seen it all, and the statistics are all over the place, including the projected 75% failure rate for pre-seed and seed-level startups in the first two years of existence.

In my experience, it’s often a lack of focus, commitment, or an unwillingness to listen to other perspectives, especially when it comes to business knowledge, finance, operations, and marketing, that can all lead to a scorched-earth scenario for many startups. And far too often, they can raise a ton of money too soon and burn through it too fast if they’re not balancing that cash flow with a common-sense vision of their future.

Without a solid anchor, early-stage founders can easily get swept in directions that can take months, even years, and countless resources to course-correct.

But between balancing the challenges of supporting business growth, hiring the right team, and staying grounded and sane during what is most likely the wildest and most unpredictable ride of any entrepreneur’s life — failure does not have to be an inevitability.

Early-stage companies need to look beyond just the capital they’re raising and the head rush of the launch, the product release, the press coverage, or the pivot. They need to focus instead on establishing a core network of experienced advisors who can help them scale, invest, stabilize, and self-promote so they can beat the odds and stay afloat.

It has always been my focus and belief as an entrepreneur in the trenches with so many experienced peers and newcomers alike, that early-stage validation and the right level of nurturing can help the vast majority of startups stay balanced, in check, and on track. It’s really that simple. Everyone needs help and guidance, and without the right navigation and experienced business advice, those jarring statistics can always come true — or they can be avoided entirely.

When true business experience intersects with young founders, the likelihood of success is more than just good luck, it’s based on a holistic, synergistic approach to maximizing expertise, core messaging, and brand identity with experienced, hands-on guidance.

So for anyone in a position to help an early-stage entrepreneur along the journey to success, here are a few guiding principles that we live by at C2 Ventures that have always worked for our founders:

  • Get in the trenches with the founding team from the get-go so you know their daily struggles, triumphs, pain points, and you’re better positioned to help them stay focused on critical objectives.
  • Understand the competitive landscape as well as they do, if not better.
  • Be really transparent about your own successes, failures, and self-discovery process — your level of honesty will always be equal to their success.
  • Open up your network, share contacts, make intros that help them gain a foothold in the industry they need to be speaking to and finding their place within.
  • Experiment with how to leverage content and explainer videos to promote their company and differentiate from competitors.
  • Always be a quick call or text away for hands-on advice and guidance on key decisions.
  • Even though the early startup days can be trying, help them rediscover the joy and fun in why they started their business in the first place.

What's on your mind?