Before I dive in and share the three qualities that I feel are essential to the success of a startup, here's a little on my background so you know I'm not just someone in academia that's postulating without any real experience.
I've been involved in three startups over the past 10-plus years. The first, became a public company and the largest search marketing firm in the world. The second, achieved an annual run rate of $1M in revenue after just six months. And my third, and current startup, Trackur, is, I believe, the world's largest social media monitoring tool in terms of registered users and currently doubling in revenue each year.
Not that I care to brag, but for those of you that thought the only Andy Beal in existence was the famous Texas banker-turned-poker player, I wanted to provide a little basis for my experience.
With that brief intro behind us, let's get to the three essential qualities that I feel are needed in any startup. While my advice is going to be biased toward technology companies, it certainly applies to any new business.
Two of my last three companies were built on necessity. Now, you may hear that "opportunity" is the key to success. You're told if you see the opportunity to build something that no one else has thought of, then you should seize it and reach for the stars. The problem with opportunity is that, despite the awesomeness of your idea, there may not be any need for it. The Segway was hailed as one of the most groundbreaking inventions of the past decade, but no one really needed it.
Necessity is the cousin to opportunity. When I built Trackur, I did so because I personally needed a simple, low-cost solution for monitoring reputations across social media. The existing solutions were either too complicated or too expensive. So, I built Trackur. I figured that if I needed such a solution, others would too. My hunch was right, and after just two months Trackur was profitable.
When brainstorming your startup, ask yourself not just if you see an opportunity for your idea, but is there a real need for it.
You can build a company for any reason you want. I hear from countless people who launched their business because they thought it would bring in a good income, or would likely sell for a high multiple, or...fill in the blank. There are many fine reasons to start a company, but if those don't include a passion for the product or service you are creating, then you'll run out of startup rocket fuel pretty quickly.
I launched Trackur with a passion. A passion for helping individuals and companies manage their reputation online. I'd spent the past 6-plus years doing just that and had just finished writing my book Radically Transparent: Monitoring & Managing Reputations Online. I lived, breathed and slept reputation management. I still do! Harnessing that passion is what has helped me grow Trackur with very limited resources, a small team and no outside investment.
Without passion, you'll not want to work late into the night. Without passion, the first obstacle you face will seem more like a mountain than a molehill. And, without passion, investors, customers, employees—everyone—will see that there's no reason to invest in your company, when you're not even doing so.
I debated as to whether my third character trait should be stubbornness or determination. In the end, I realized that the two go hand-in-hand; you need stubborn determination to ensure the success of your startup.
There have been many times where throwing in the towel seemed like the only option. Trackur's had its fair share of growing pains—and still does. We've also seen dozens of competitors spring up around us—raising millions in venture capital or getting quickly acquired. Throughout all the setbacks and roadblocks, I've only ever once thought of bailing; An offer to buy the company can be pretty enticing when the alternative is to double down and go for broke.
Perhaps there's little gambler in this Andy Beal too, because a little over a year ago that's what I decided to do. I invested further into Trackur, hired more people and jettisoned just about every other project that took away from my focus on my fledgling company. That stubborn determination paid off. We doubled revenues, celebrated our 35,000th registered user and announced the most ambitious upgrade to our platform in the company's three-and-a-half-year existence.
Stubborn determination doesn't mean betting the farm each and every time you face a challenge, but it does mean you make decisions with that same passion and conviction you felt when you first launched your company.
Are these the only qualities needed to ensure a successful startup? Maybe not. But, given the choice, these are the ones that I would suggest are essential. What about money? What about smart people? What about competitive pricing? What about a business plan? Aren't these also essential to the success of a startup?
Actually? No! And I'll share with you why these and other factors are nothing but myths...in my next post.
Andy Beal is the CEO of Trackur, the world's largest social media monitoring tool. He is also the coauthor of Radically Transparent, a transplant from England, a black-belt in martial arts and an avid ukulele player.