Things Remarkable Startups Have In Common

Why do some startups succeed and others don't? Here's a hint: It doesn't have to do with if an idea is good or bad. Indeed, the successful entrepreneurs are able to run with amazing concepts and pivot otherw when needing. There are a few more tried and true principles that can contribute to the success of your new company.

Among other things, these are four things remarkable startups have in common.

1. Founders are insanely passionate about the idea. Don't start a business without passion. You won't be able to see it through if you are not really into your idea. Founders of most successful startups started searching for solutions to a problem they cared about and made it their focus.  

"You have to be burning with an idea, or a problem, or a wrong that you want to right. If you're not passionate enough from the start, you'll never stick it out," Steve Jobs has said.

Founders with great passion tend to inspire others to greater success, and they look out for those traits in new hires. According to best-selling authors and workplace strategists Kevin and Jackie Freiberg, passion enables innovation and creativity and makes employees want to stay in their jobs and contribute, even when they’re not feeling their best.

2. They don't try to do too much at once. Laser focus is immensely crucial for the success of every new business. What is the one thing your startup is known for?  Your startup should be focusing on the one thing that makes you stand out. All the successful and well-known startups you know today are doing the one thing that makes them stand out.

For instance, Snapchat knows a picture is worth a million words and have allowed users to send photos and videos that disappear a few moments. Dropbox wants to be the go-to solution for uploading and sharing files in the world.. Most great startups start out to provide simple services or products, but as they grow customers and users tend to demand more, the company needs to improve and make solutions even better.

"The most important things for startups to do is to focus. Because there's so many things you could be doing. One of them is the most important. You should be doing that. And not any of the others." says founding partner of Y Combinator Paul Graham.

3. They value their customers and take great care of them. Does your startup know how to design and deliver great customer service? Successful startups are constantly seeking to satisfy their customers. The importance of reinforcing awesome customer service should be made clear among your employees. Design your products with the customer in mind. Remarkable startups listen and respond to their customers' evolving needs and expectations.

Strive to make your customers feel that signing up with you was one of the best decisions they ever made, and you will likely have their business for a very long time. As your product changess, the best opportunity you have at delivering the best service is a close relationship with your customers that value their feedback and user experience. Your customers are the people that support you, trust you and most importantly, rely on you for the service or product you offer. They could have chosen your competitors, but they chose you. Make them a part of your evolving development process. Startups that grow with their customers ultimately win.

4. Entrepreneurs don't forget the importance of culture. Successful startups establish and maintain some the best company cultures that promotes and motivates employees. The team behind a product or service is one of the most important factors for a successful business. The first people you hire for your startup are critical to your startup's success. And cultural fit is as equally important as competence when hiring your best people.

People with the right skills and personality are more likely to influence your small team to greater heights than just competent hires. Culture takes time and effort to build, but as long as you don't lose sight of it, you are on a journey to building a great company. It is well known that Google has a unique culture and some of the company's success can be attributed to this culture. 

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How to Start a Business Online

There is a proven sequence of steps you can follow to guarantee your success when you're starting a small business online. I've seen thousands of people start and grow successful businesses by doing the following:

1. Find a need and fill it.
2. Write copy that sells.
3. Design and build an easy-to-use website.
4. Use search engines to drive traffic to your site.
5. Establish an expert reputation for yourself.
6. Follow up with your customers and subscribers with e-mail.
7. Increase your income through back-end sales and upselling.

Anyone, from newbie to seasoned online entrepreneur, can benefit from this process in learning how to start a business online.

Step 1: Find a need and fill it

Most people who are just starting out make the mistake of looking for a product first, and a market second.

To boost your chances of success, start with a market. The trick is to find a group of people who are searching for a solution to a problem, but not finding many results. The internet makes this kind of market research easy:

• Visit online forums to see what questions people ask and what problems they're trying to solve.
• Do keyword research to find keywords that a lot of people are searching, but for which not many sites are competing.
• Check out your potential competitors by visiting their sites and taking note of what they're doing to fill the demand. Then you can use what you've learned and create a product for a market that already exists--and do it better than the competition.

Step 2: Write copy that sells

There's a proven sales copy formula that takes visitors through the selling process from the moment they arrive to the moment they make a purchase:

1. Arouse interest with a compelling headline.
2. Describe the problem your product solves.
3. Establish your credibility as a solver of this problem.
4. Add testimonials from people who have used your product.
5. Talk about the product and how it benefits the user.
6. Make an offer.
7. Make a strong guarantee.
8. Create urgency.
9. Ask for the sale.

Throughout your copy, you need to focus on how your product or service is uniquely able solve people's problems or make their lives better. Think like a customer and ask "What's in it for me?"

Step 3: Design and build your website

Once you've got your market and product, and you've nailed down your selling process, now you're ready for your small-business web design. Remember to keep it simple. You have fewer than five seconds to grab someone's attention--otherwise they're gone, never to be seen again. Some important tips to keep in mind:

• Choose one or two plain fonts on a white background.
• Make your navigation clear and simple, and the same on every page.
• Only use graphics, audio or video if they enhance your message.
• Include an opt-in offer so you can collect e-mail addresses.
• Make it easy to buy--no more than two clicks between potential customer and checkout.
• Your website is your online storefront, so make it customer-friendly.

Step 4: Use search engines to drive targeted buyers to your site

Pay-per-click advertising is the easiest way to get traffic to a brand-new site. It has two advantages over waiting for the traffic to come to you organically. First, PPC ads show up on the search pages immediately, and second, PPC ads allow you to test different keywords, as well as headlines, prices and selling approaches. Not only do you get immediate traffic, but you can also use PPC ads to discover your best, highest-converting keywords. Then you can distribute the keywords throughout your site in your copy and code, which will help your rankings in the organic search results.

Step 5: Establish an expert reputation for yourself

People use the internet to find information. Provide that information for free to other sites, and you'll see more traffic and better search engine rankings. The secret is to always include a link to your site with each tidbit of information. 

• Give away free, expert content. Create articles, videos or any other content that people will find useful. Distribute that content through online article directories or social media sites.
• Include "send to a friend" links on valuable content on your website.
• Become an active expert in industry forums and social networking sites where your target market hangs out.

You'll reach new readers. But even better, every site that posts your content will link back to yours. Search engines love links from relevant sites and will reward you in the rankings.

Step 6: Use the power of e-mail marketing to turn visitors into buyers.

When you build an opt-in list, you're creating one of the most valuable assets of your online business. Your customers and subscribers have given you permission to send them e-mail. That means:

• You're giving them something they've asked for.
• You're developing lifetime relationships with them.
• The response is 100 percent measurable.
• E-mail marketing is cheaper and more effective than print, TV or radio because it's highly targeted.

Anyone who visits your site and opts in to your list is a very hot lead. And there's no better tool than e-mail for following up with those leads.

Step 7: Increase your income through back-end sales and upselling 

One of the most important internet marketing strategies is to develop every customer's lifetime value. At least 36 percent of people who have purchased from you once will buy from you again if you follow up with them. Closing that first sale is by far the most difficult part--not to mention the most expensive. So use back-end selling and upselling to get them to buy again:

• Offer products that complement their original purchase.
• Send out electronic loyalty coupons they can redeem on their next visit.
• Offer related products on your "Thank You" page after they purchase.

Reward your customers for their loyalty and they'll become even more loyal.

The internet changes so fast that one year online equals about five years in the real world. But the principles of how to start and grow a successful online business haven't changed at all. If you're just starting a small business online, stick to this sequence. If you've been online awhile, do a quick review and see if there's a step you're neglecting, or never got around to doing in the first place. You can't go wrong with the basics.

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Start up -What Legal Issues Should I Consider Before Starting a Social Network?

Like any other business endeavor, a social network brings up a variety of legal issues. Here are just a few that you'll need to consider:

• Social networks can take a great deal of capital to get off the ground. Will you be looking for investors? Hitting up family or friends for loans? Documenting these financial contributions, and determining whether people are entitled to "a piece of the action," involves securities and valuation issues.

• You'll want to choose a legal entity that will own the social network. Which form of business should you be? That depends on your financial plans and exit strategy.

• How will you collect and then use data from users? This brings up a host of privacy issues--both in terms of sharing email addresses, as well as data security issues if you take credit cards, store Social Security numbers or collect other private information on your site.

• If your social network is a playground, what kind of referee will you be? Users want to know there are "rules of the road" and what kind of treatment they can expect in your playground. If yours will be a social network for “haters” and I’m a pacifist, I’ll want to know that before I join. That's where your site’s terms and conditions come in handy.

• And then there's the competition. First of all (and this is not strictly a legal issue), how will you distinguish your social network from the many others that are out there? If you don't have a clear and differentiated value proposition, you're unlikely to win people over versus the more known and popular sites already available. Second, if you’re a copycat network, you do run the risk of being sued, especially if your logos and design are similar to those that already exist and have achieved some prominence.

Those are some initial thoughts. If you're serious about getting this started, and it's not just a pipe dream, you'll want to flesh out your plans to take full account of the competition, and consult with a business attorney who is familiar with doing business and creating networks online. Investors in particular will want to see that you have weighed all of the risk factors carefully before they pony up their cash.

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Different Ways to Plan for the Future - Start up Business

Perhaps you've wondered if it's better to start your own company or work for someone else. There are many ways to consider that question but one of my favorite ones is to explore how entrepreneurs think. Once you know that, you can compare yourself to them and decide whether you share their approaches to the world.

Entrepreneurs may use two types of business logic for thinking about the uncertainty that confronts them: prediction, analyzing the past to forecast the future and plan accordingly, andcreation, trying out a solution and moving forward based on how well it works.

One of the exam questions I used for the midterm for my Babson College course Foundations of Entrepreneurial Management involved having students to define each of these types of logic and to say which approach is best.

It's a trick question that most students get right. The answer is that each approach works. But the challenge is knowing which circumstance requires which style of thinking.

Using the past to predict the future. For example, if you are an entrepreneur in an industry that's fairly regular, such as selling Christmas trees, prediction logic will work well. It is probably fairly easy to analyze previous years' data of tree sales by species and size for each day of the year.

Odds are very high that you will start to see sales rise on Thanksgiving and perhaps peak 10 days before Christmas. And if you are trying to decide how many different trees to order, you can use historical experience as a first approximation of what to order this year, adjusting the numbers in case new competitors pop up or the weather is going to be very different than in the past.

In other cases prediction logic is a terrible approach and creation logic yields a better outcome.

Related: Keep Innovation Flowing as Your Startup Grows

When creation logic bears fruit. Consider the story of Max Levchin. He immigrated to the United States from Ukraine and attended the University of Illinois. He liked building operating systems for computers and after he graduated decided to co-found Confinity, a company that would build operating systems for the handheld Palm Pilots that proliferated in the 1990s.

He did that but had few buyers. So he decided instead to focus on building operating systems for another handheld device -- the digital wallet. Levchin got a mostly tepid response from the market for that as well.

One feature of his software generated a huge amount of email traffic from people who were trying the product -- its ability to use his software to pay for items that were being auctioned on the then fast-growing eBay.

Please, Max -- the emails implored -- make this online auction currency easier to use and have it run faster. For six months, Levchin ignored the emails because he just wanted to build operating systems.

Eventually he gave in to customer demand and built up the auction currency function. Confinity is merged with Elon Musk's X.com, and called PayPal just like the digital wallet product. In 2002, eBay acquired PayPal for $1.5 billion.

Best use scenarios. Creation logic seems inefficient but it can yield excellent results in situations with great uncertainty as long as an entrepreneur is happy with the idea of doing frugal experiments, analyzing the results and then trying again based on the feedback.

If you are in that rare entrepreneurial situation where the past gives a fairly clear picture of the future, then prediction logic is a far more efficient way to figure out what to do.

If you can think both ways and know when each way is appropriate, you may well have what it takes to be an effective entrepreneur.

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How a Biomed Tech Company Raised $35.7 Million

When Charu Ramanathan founded CardioInsight in 2005, she knew she had a technology on her hands with the potential to help save people's lives. It provided a minimally invasive way to create a 3D map of the heart's electrical activity, one that could help in the diagnosis and treatment of heart disease. But with any technology in the biomedical space, bringing it to market would require a long and painstaking process, one involving significant research, clinical testing, regulatory approval, and most of all – funding.

The field of biomedical technology is a risky one for investors to enter, involving intensive R&D, thorough clinical testing, complicated regulatory approval and a long lag-time before the product is ready to go to market. "The regulatory requirements are significant," says Kevin Mendelsohn, vice president of finance and corporate development at CardioInsight. "That regulatory hurdle requires much more capital and time than say a software company or a healthcare IT company. That’s where a lot of the money goes."

Ramanathan and her founding partner were researchers, not business people, but over the course of six years, they still managed to raise $35.7 million from government funding, institutional supporters, venture capitalists, industry supporters and angel investors -- all before bringing the product to market in Europe in 2012 with a limited launch. Getting this funding meant a lot of planning and forward thinking on the part of Ramanathan and everyone involved. Here are five key factors to keep in mind when raising funding in the field of biomedical technology.

It's not enough to show your technology works. It has to be a game-changer. In CardioInsight's case, the company offered a new kind of technology that was far less invasive than what was currently available. More than any other field, biomedical technology requires that kind of innovation since want unique opportunities that both minimize risk and maximize return. "Products that have marginal differences from solutions in the marketplace have trouble getting financing," says Mark Low, managing director of the Global Cardiovascular Technology Center, which helps provide funding and resources to early-stage cardiovascular technologies.

Tap into your region’s resources. The company’s technology was developed at Case Western Reserve University and CardioInsight’s first location was in the University’s hospital's health system, helping to significantly reduce costs. "That gave them a headquarters that was much more cost effective than if they were to go out and try to sign a lease at commercial building," says Joseph Jankowski, chief innovation officer at Case Western.

Additionally, CardioInsight first raised $2 million from regional institutions including $250,000 from Case Western's technology transfer program, matched both by the early-stage venture development organization Jumpstart and the venture capital fund Draper Triangle Ventures. Tapping into the university and region's resources gave CardioInsight the initial validation necessary to attract a VC firm. 

Figure out how to show the greatest value early on.CardioInsight had clear milestones to meet in order to show investors down the line that the technology had the brainpower and leadership behind it to succeed. "With all venture-backed companies the greatest challenge remains how to get the most value," says Mendelsohn. In the case of CardioInsight, that meant proving the technology worked in the clinical setting, being able to generate reproducible data, showing it could be applied to various clinical applications that addressed an unmet need, and proving that it could generate a significant financial benefit.

Know your exit strategy. If a company is still relying on investment capital after seven years and more than $30 million of VC funding, it must have a plan for coming to market, says Jankowski. "That’s another fear for investors," he says. "How much money and time do you need to get to an exit so that I can get my money back?" For CardioInsight, Ramanathan says the technology will go to market in the U.S. in the next 18 months, in 2015, bringing the technology's time to market in the U.S. to less than ten years. Most investors are looking for a return in no more than eight to ten years. "If you say to a venture fund, 'I could get you ten times your money but it's going to take 20 years,' they are going to pass," says Jankowski.

Be prepared to kiss a lot of frogs. The first $2 million that CardioInsight raised primarily from state funding helped the company raise the next $32 million. When you're dealing with such significant amounts of capital, investors will be particularly cautious and picky when it comes to making decisions. "One VC's frog is another VCs prince," says Paul Cohn, managing director for Fort Washington Capital Partners, which manages a fund responsible for providing capital to CardioInsight. "You've got to talk to a number of venture capital funds to find the one that’s a right fit."

Often that takes a level of confidence and persistence unmatched in most other industries. It means believing wholeheartedly in your technology, because others often won't. "I felt I truly should rely on myself," says Ramanathan. "At the end of the day, it's the passion that drives the business forward."

Correction: An earlier version of this article incorrectly stated the name of firm Fort Washington Capital Partners.

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