3 early signs a startup is going to be successful

Tags: startup, business
Published: 2020-08-11 06:35:05

Most startups fail - about 90% according to the prevailing industry figures. This is not meant to discourage or dishearten entrepreneurs and founders, but rather to challenge them.  Because on the other side of that conversation, there are many startups that survive and thrive.
 
In all these startup success stories, there are always some underlying themes and traits that connect them. While there is no formula that guarantees success, there are some tell-tale signs.
 
Here are some of the early signs that a startup will make it:
 
**1. You are providing a valuable solution**
 
There are a lot of good ideas for products and services, but not all of them are marketable, much less work as a business. More importantly, not all of them solve a real problem for real people.
 
Is your product or service making the world a better place? Is it making people’s lives easier? Be it for businesses, the employees of those businesses, or even for the consumers, your offer should be something that provides convenience and real value to the end-users. No matter how effective your marketing team is, it is tremendously difficult to sell things that do not help anybody.
 
Especially for tech startups, founders bear the burden of coming up with a new and revolutionary technology that can (and will) disrupt the industry. With [custom software development for startups](https://devsdata.com/software-development-for-startups/) — as well as plenty of opportunities for funding and other types of support — within easy reach, it is a little easier to create and offer a solution that will be useful and valuable. 
 
IT consultancy and recruitment companies like [DevsData](https://devsdata.com/) reiterate that be it for software development or company operations, business understanding should come first. If you understand your business and its offered solutions, you will understand if the consumers will embrace it or no, if it is valuable or not.
 
You have the resources and the possible solutions to improve the way you run your business and to improve the lives of your customers. If you can achieve a strong product-market fit, you will have a strong footing for your organization to take the next step to growth.
 
 
**2. There is a great team in place**
 
Having harmony in the C-Suite, as well as between the C-Suite and the rest of the organization is like having a well-oiled machine ready to be kicked into the next gear at any moment.
 
Starting at the top, nothing destroys a promising startup faster than misunderstanding and non-alignments between founders and executives. When these people fall out, the operations of the business, the control and ownership, and even the survival of the company are threatened. If founders and partners trust and respect, they are more likely to look out for each other as a group, and not as individual executives, which will result only in good things for the whole organization.
 
When it comes to the team, a high turnover rate is not a good sign. You will want a high retention rate, mostly because of having the right people in the right positions. It is a solid sign that a company is thriving, as it shows the employees are not eager to jump ship and are satisfied, if not happy, with their current work situations. 
 
Moreover, there should be a good harmony between the executives and the rest of the organization. Engaged employees that are happy with the way things are run do not leave companies — and that engagement, contentment, and excitement are contagious, especially if you are trying to grow the team.  
 
If a startup does not have the right team or if the executives are not really paying attention and caring for their employees, they will struggle to get and retain customers.
 
 
**3. There is a positive cash flow**
 
Only two in every five startups become profitable, while one in three will either break even or lose money. Cash flow is important in any business venture, but when it comes to new businesses, it is important to look at it from both ways: money coming in and going out.
 
If your company is already turning a steady profit, congratulations! — to a great extent, you have already reached a huge milestone. On average, it takes a business around three years before they see an overall profit from a new product, and it could likely be even longer for startups. 
 
However, if a startup is burning through its resources with a “spend now to grow now, worry about profitability later” mindset, that should be a red flag. In these times when getting funding is becoming more difficult, lean operations are the tried-and-tested approach. Having a high “burn rate” is no longer worth bragging about.
 
If a startup is able to stretch and conserve their funds, even if more funding is available, it is a good sign that points to success in the future.
 
 
**Some final thoughts**
 
Of course, success in business is a combination of many things, not only three. 
As the saying goes, do not count your chickens before they hatch. Do not be overconfident that you will succeed, but also do not be too pessimistic that your business outlook is always on the negative side.
 
Have the right idea, build the right team, get all the systems and solutions you will need to operate, fail, fail fast, adapt, iterate, and carry on. 
 
If you can see these traits in your business, exercise cautious optimism still. You can rest a little bit easier knowing you are on the right track.