In 2012, Meta CEO Mark Zuckerburg told potential investors that his company had a unique approach to business growth: “Move fast and break things.” The idea of moving fast and disrupting the status quo has since become a pervasive mantra for tech startups everywhere. But does this catchy maxim work? Perhaps not. According to reports, nearly 90 percent of disruptive startups fail. Businesses fail for many reasons; sometimes, they lack industry experience, and other times, the product doesn’t meet customers’ needs. To set a new company up for long-term success, it’s imperative for leadership to shift to a business growth mindset. This means developing sustainable strategies, using the right tools, doing market research, and listening to customer feedback.
Shifting to a growth mindset
Liz loves baking cupcakes for bridal showers and birthday parties. Her cupcakes always get rave reviews from friends and family, so she opens a boutique bakery. It’s not long before she realizes there is more to running a bake shop than making cupcakes and selling coffee. Now, she has to consider bookkeeping, accounting, marketing, hiring employees, equipment maintenance, and generating a profit. Suddenly, her dream looks a lot different.
Most people start a business because they have a great idea or are passionate about what they do. But, as Liz found out, running a business means putting passion on the back burner and shifting into an entrepreneurial mindset. This is true for tech start-ups as well. To ensure success, it’s necessary for the founder to transition from thinking like a software engineer to considering all aspects of their business. Enter enterprise leadership. According to Korn Ferry, companies going through transition “will need agile Enterprise Leaders—people who know how and when to perform and transform in today’s complex world, not just in their own area but horizontally, across the broader enterprise and ecosystem.” Agility is the keyword—being flexible, nimble, and willing to change when needed are qualities that will help a company achieve long-term sustainable growth. For example, Apple overcame its early growing pains by thinking about the customer every step of the way, from design to usability.
Why start-ups fail
From lack of cash to personnel problems and intense competition, there are many reasons start-ups don’t make it. A CB Insights report determined that 42 percent of startups fail due to an inadequate product-market fit. This means that the company didn’t do enough market research or consider the needs of its customer base.
For example, Dave Sloan of the tech start-up Treehouse Logic gave a post-mortem on why his company flopped, “Startups fail when they are not solving a market problem. We had great technology, great data on shopping behavior…etc., but what we didn’t have was technology or business model that solved a pain point in a scalable way.”
How to overcome obstacles and position companies for scalable, sustainable growth
According to Forbes, “To increase the chances of success, IT startups should focus on understanding their target market, developing a solid business plan, building a strong team with diverse skill sets, securing adequate funding, and establishing effective leadership. It is also essential to continuously evaluate and adjust the strategy based on customer and market feedback to ensure that the startup stays relevant and competitive.” Additional tips include starting with a solid business plan, hiring consultants (if needed), listening to the experts, and ensuring that leadership develops a growth mindset.
Finding the best enterprise and cloud computing tools for business growth
For tech start-ups, spending a lot of money on customized products may be tempting, but when vetting new business tools, it is vital to look for those that deliver the best return on investment (ROI). Consider outsourcing and using existing technologies that are easy to launch and scale. Google Analytics, Tableau, or Power BI are effective business analytics tools.
Cloud computing can benefit organizations with its many uses. According to Sam Solutions, cloud computing can be used for “large-scale data storage and analytics, delivering a web-based service, scaling infrastructure, or disaster recovery purposes.” Partnering with existing providers like Amazon Web Services (AWS), Microsoft Azure, and cloud-based payment systems like Digital River can save companies money and time. Often, these cloud providers offer compliance tools and superior cybersecurity services, making them a good fit for highly regulated industries like healthcare, pharmaceuticals, and government.
The future of business start-ups looks different
For tech start-ups, growth and sustainability require a different way of thinking about business, people, and technology. “Moving fast and breaking things” might lead to increased sales in the short term, but it can also lead to a spectacular flame-out. It’s critical for CEOs and other leaders to be willing to slow down and take a more holistic and thoughtful approach to business growth. This leads to the question: how will the next generation change the business world? According to Forbes, Gen Z already calls for “authentic leadership, robust learning and development programs, integrated work-life balance, and a dedication to diversity, equity, and inclusion.” Established leaders can foster innovation and growth in the workplace by learning from Gen Z and being open to ideas from a wide range of people. This is how companies can continue to thrive.
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