Why do some startups thrive while others limp along?
Is it vision? Savvy leadership? Or maybe it’s timing or even dumb luck.
That question arose during a meeting I had with a potential vendor.
The vendor, who is in the IT industry, told of the time he hired a smart, young associate to help him grow the brand. The results were good but not spectacular.
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Then, for reasons unrelated to business, the associate moved away and started a similar company. Now just a few years in, the vendor’s one-time associate has more than 40 employees and operates a multimillion-dollar concern, far outstripping the success of his mentor.
What did the associate do right that the vendor did wrong?
It’s hard to know, and the answer is almost certainly complex. But in the life of every successful business, it seems, there is a moment in time – a key event or decision – that can lead the way to success or failure.
For me, although my story as a business owner is still being written, one of the best decisions I made was to survey my customers as part of a “listening tour,” which I wrote about at the end of 2013. By putting aside what I thought I knew, I was able to make some adjustments that quickly resulted in bottom-line gains.
If you own a business, perhaps you’ve had your own moment of reckoning – a time when you had to make a tough call that ultimately led to greater success. If so, I’d like to share some of our stories with ShopTalk readers. Send me an email at firstname.lastname@example.org.
Meanwhile, I put the question of success to Ted Zoller, director of the Center for Entrepreneurial Studies at the Kenan-Flagler Business School at The University of North Carolina at Chapel Hill. I asked him to list some of the common traits he’s seen in successful startups and the people who manage them.
He listed these four:
They systematically listen to customer needs. “It’s intentional,” he said. “They will ask questions not only among the customers who are satisfied but those who are dissatisfied.”
They establish an identity. Everything about your business should send a message that speaks to its value proposition. “It’s not a bag of adjectives or a bunch of descriptors,” Zoller said. “It’s actually meaningful and tangible delivery to the customer.”
They create a following. “Very seldom does a solopreneur become successful,” he said. “They create a tribe of people who are vested in their success … The great, break-though entrepreneurs create a community around them. The business becomes its own story. It’s not just the story of the single entrepreneur. The business actually has its own identity, and it’s motivated by the entrepreneur.”
They reinvest. A successful business must be relevant in its market, and that means making adjustments as the market dictates. “In order to acquire relevance, you have to use your net revenue – your profit – to actually make investments at key points in the growth of a business,” Zoller said.
Glenn Burkins is editor and publisher of Qcitymetro.com, an online news site targeting Charlotte’s African-American community. He is a former Wall Street Journal reporter and Charlotte Observer business editor.