fbpx

Three Shortcomings That Might Be Hindering Your Success Path As A Start-up

Each and every one of us dreams to see our Start-up soar high, right from the time the idea of it generates in our mind.

Yet, a large number of entrepreneurs still ache to see their desired results.

And that can be frustrating for sure!

If you are putting in all the intelligence, money and hard work what is it that is holding you behind?

Well, we are here to give a reality check on that!

Entrepreneurs aren’t low on ideas for fascinating new products or companies,  Yelp for dogs or Uber for cats, you name it and we are sure someone, somewhere might have thought of it at least once, as a startup idea. 

But for all we know, a start-up is never about the idea or is it? There is lot of planning, articulation, strategy and execution that goes behind that very idea.

But in the enthusiasm of finding a mere idea what’s often overlooked is a comprehensive framework for how you marshal the resources—such as finance, employees, and partners—to boom-star the idea to life.

In fact, let us tell you something that might come as a shock

Researchers believe that entrepreneurs are more likely to be successful when they leverage Non-Market, Non- pecuniary resources!

Start-up accelerator programs dedicate huge emphasis and effort on how to pitch to raise capital, and these programs generally conclude in a ‘demo day’ presentation to venture capitalists. However, a Study by Harvard Business School believes, that this might be a completely wrong mindset.

While financial capital is crucial, developing human capital and social capital can be just as significant, if not more so, and frequently gets tight shrift.

So why not have a demo day for hiring as well? Or for developing social connections?

Here are 3 areas one needs to work immediately on, in order to see their startups reaching a new highs.

  • Scouring for reserves outside one’s primary connections.

When it comes to hunting down resources, most startups inherently start with their acquaintances. However, a lot of the prevailing research shows that entrepreneurs probe very narrowly. In fact in most “There is a tendency to go only to close friends and family members.”

Beyond that, entrepreneurs tend to network with a narrow set of investors who may or may not be competent to fund their ventures. A number of academic papers have assessed the efficacy of more assertive networking. In the 150 papers the experimenters examined, only 30 looked at this strategy. Few behaviour studies, however, suggest that entrepreneurs with an outward-looking viewpoint can thrive in finding better partners outside of their immediate network.

  • Accessing non-market resources:

Once entrepreneurs recognize the community and networks that may aid them to accomplish its goals, far too much effort goes toward deciphering that into financial capital. Entrepreneurs often are more successful when they can leverage non-market, non-pecuniary resources.

For instance, a startup can profit more from guidance and mentorship from a successful person in their industry, or in-kind subsidies of legal or financial services, than they can from a mere input of cash.

Firms can acquire those reserves through narratives and storytelling, or by seeking out members of a widespread group.

So how does one be part a well-connected network?

Often having a startup with a social mission helps, as investors read it as a cause towards social development that they can be a part of.

Apart from that, Communities based around a sport or a common connection such as a university can also be a rich supply of financial and non-financial resources outside the traditional VC realm.

A vast number of angel investors have non-financial motivations,  for many, it’s the need to feel engaged with young entrepreneurs and being tied to a community, rather than a way to earn lots of money.

  • Transferring resources through informal transactions.

Researchers believe that a lot of entrepreneurs and start-ups verge to concentrate too extensively on formal contracts in order to disseminate knowledge or other resources to their company, rather than less formal agreements.

 With early-stage tech companies, there is an enormous vigour and priority on working with mentors, but the entrepreneur often doesn’t know exactly what he or she needs from a mentor. Such a process could be really hard to write a contract for.

In fact, Harvard business school suggests, if start-ups relied on confidence and mutual understanding, setting efforts into building a strong relationship instead of drawing up a formal legal contract it would be far more beneficial.

 Yet, such connections are barely studied by academic researchers and are often subverted by entrepreneurs themselves in favour of more conventional arrangements.

CONCLUSION:

The combination of these three attributes—proactive networking, non-market logic, and informal governance—can create an honorable circle, where each step in the process opens up new opportunities beyond the conventional funding mechanisms.

Which in turn may help you to achieve your desired apex for your startup!

Tags

top