Every entrepreneur has the dream of starting their own company and watching it grow into a million dollar corporation. Of course, such dreams rarely become a reality. According to one study, approximately 93% of startups eventually fail. What separates the 7% from all the rest? Small companies that end up making it big tend to demonstrate a number of similar characteristics. While the following is not a comprehensive list, it does highlight important elements of any successful company.
Keeping Things Simple
It’s easy for companies to overwhelm customers with too many products or too many options. Many customers simply don’t have the desire or attention span to put in extra work to buy a product. Companies that start out with too many ideas or too unrealistic a vision can run into trouble.
The online glasses shop Warby Parker is one example of how simplicity can pay off. The company sells trendy glasses online, for a reasonable price. Instead of offering hundreds of variations of glasses like many high end glasses stores, Warby Parker simply offers 50 variations. Their website allows customers to virtually try on glasses by uploading a picture of themselves online. For each pair that a customer buys, the company gives a pair to someone in need. By creating a useful product yet keeping things simple, Warby Parker has been able to build a successful brand.
The Ability to Adapt to Circumstances
Entrepreneurs may start out with a very specific idea of what they want their product and company to look like years down the road. However, the most successful businesses know that adaptation is essential. Customer desires may change. Technology may present new opportunities. Companies may face financial limitations they weren’t expecting.
One example of this comes from the home security company Vivint. The now multi-billion dollar company was started as a simple business that went door-to-door selling pest control. In Just a few years’ time, it had morphed in to a home security company. From there it added home automation to its repertoire. Currently, the company is a contender in the global market for solar-powered homes as well, making Vivint a prime example of the need to changes and adapt to the ever-changing business landscape.
The success of a company like NuSkin demonstrates the needs for small companies to adapt to their circumstances. In 1984 Blake Roney graduated from college and decided to start a business with his sister and friend. With little funds to get the company off the ground, Roney needed to find a way to get the message of his product to consumers. Lacking funds for proper advertisement, the company decided to adopt a networking system or multi-level marketing (MLM).
The company was attacked for using MLM, and even faced legal opposition. However, they didn’t give up. They worked through the adversity and emerged successful. Today the company is worth over a billion dollars, and continues to grow worldwide. NuSkin may have never even gotten off the ground if its founders weren’t willing to adapt to their financial situation and implement a business model that was right for them at the time.
Understanding the Needs of an Audience
Ultimately a company cannot succeed if they don’t sell a product or service that is valuable to consumers. What may be a great idea in one person’s mind may not catch on to a wider audience. The best businesses realize that there is a need and work to fill that need.
One example of this characteristic is the company Mattel. Despite the fact that they are now the largest toy company in the world, the founders, including Elliot Handler, started out selling picture frames in a garage store. The founder’s wife, however, had a different idea in mind. She had noticed her daughter’s loves of dolls. It was especially interesting to her that her daughter tended to put these dolls in adult situations. At the time, almost all dolls were infant or child representations. Recognizing that there might be a need for adult doll products, the company switched gears and started production on the Barbie Doll. It became a hit, and the product continues to sell at a rapid pace.