Many entrepreneurs dream of creating highly profitable business ideas and building companies that go on to be very successful. However, despite the fact that so many people dream of startup success, roughly 50 percent of all startups fail within the first five years.
Because there is such a high failure rate for new companies, it is helpful for entrepreneurs to understand why some companies obtain success where others fail. Here are 5 lessons learned from some of the most successful startups of all time.
- Even the oldest and most established industries can be disrupted
Uber, the ride-sharing giant perfectly demonstrated that even thoroughly established and traditional industries can be disrupted. Uber was founded in 2009, and in its less than ten years in existence, the company has grown to a valuation of roughly $50 billion. Uber’s staggering growth was due to the fact that it leveraged app and smartphone technology to allow anyone with a valid driver’s license to become a driver for hire and use his or her own car to do so. This business model is very different from the traditional taxi company model. However, Uber’s willingness to challenge existing industry standards and business practices was fundamental to its success.
- Personalization can be highly appealing to customers
Pandora, the music streaming company has proved that personalization can be crucial to increasing brand loyalty and improving user experience. Pandora tailors music stations to the user’s tastes and makes recommendations based on this taste. This service allows the user to feel understood and valued by the company, and it is one of the driving factors that have pushed Pandora to be valued at over $1 billion.
- The more people that can benefit from a business solution, the better
The more people there are around the world who can benefit from a business product or service, the more likely that the company offering the business product or service will be to be successful. This is because higher numbers of customers and users tends to lead to larger revenue levels, and increased brand awareness. Airbnb, the short-term rentals unicorn currently has over 150,000 users. This enormous user base is a huge part of the reason why Airbnb currently has a valuation of about $30 billion.
- Perpetual innovation can help you stay ahead of your competitors
While it is good to create one product that people love, it can be better to create new products periodically which are cutting-edge. This is the model that Apple has used since the 1980’s to beat out its competitors and to continue to delight its customers year after year. Apple has demonstrated incredible innovative capabilities. From its early personal computers, to the iPod, to its latest smartphones, Apple has innovated with great success for the better part of four decades. Perpetual innovation is one of the keys to Apple’s success, and its recent valuation of roughly $922 billion.
- Creating products that solve key problems can lead to rapid scaling
Snapchat is a perfect example of a company that did this with extreme success. Snapchat essentially solved the problem of privacy for social media. This is because Snapchat allows people to send messages which are automatically deleted after a short period of time. Ever since social media became a major trend in the early 2000’s, people have become accustomed to sharing more and more personal information, and having more and more private text-based conversations. Snapchat helps to eliminate a lot of the risk of having private messages and content leaked out or discovered by the wrong people through its auto delete feature. This creative solution for a modern problem has propelled Snapchat up into the stratosphere and helped it to reach a valuation of $33 billion at the time of its IPO in 2017.
Disrupting long-standing industries, personalizing products and services, catering to as large a customer base as possible, perpetually innovating, and creating products that solve key problems are strategies that have helped some of the most successful startups of all time to thrive. If you use these strategies for your business, it is not a guarantee that your startup will succeed. However, it is possible that incorporating one or several of these concepts into your business model could increase your chances.