5 Reasons Why Startups Succeed

Ideas are fairly easy to come by, but putting them into concrete plans that actually lead to building a start-up is a whole different story. Now, why do some startups succeed while others fail? Read on to know why!

5 Reasons Why Startups Succeed

Startups can be found anywhere, and those aimed at solving problems, introducing new technologies, or simply elevating our way of life can be found in nearly every country. Though startups are a great way for an idea to grow and thrive, unfortunately, many seem to fail.

On average, 9 out of 10 startups go out of business within a year and for the most avoidable reasons. Many may have been struck with sudden irreversible failures, while others may have simply been unlucky.

Startups are literally journeys into the unknown, and entrepreneurs must be at ease with ambiguity, uncertainty, and a wide range of challenges.

To help give you some clarity with your startup strategy, we have compiled our top 5 reasons why startups succeed.

1. They establish the right target market suitable for their products or services.

Yes, we all know this! Putting up the right financial resources may make or break your company – and this aspect does not only involve placing the right capital, but it also involves establishing the right market demand.

In a lot of startups where business is just starting to take place, funding can be in short supply.  By identifying the proper market demand, we are able to create products that are appropriate for our target market. This means that we are certain that there will be someone who will buy our products and avail of our services.

Having chosen a market that is not in line with the target group may prematurely cause the market to decline because of the irrelevance of planning in putting the two together properly. An example of which is Woodero, a startup company that has successfully been able to raise capital via crowdfunding, but seemed to have failed because of the lack of demand with its wood-made smartphone and tablet cases.

In this aspect, we must carefully ask ourselves: how sure are we that our services are congruent with our target market, and beyond that, we must make sure to ask how good this connection is so much so that there will actually be enough market demand to sustain the startup.

Once we establish a product to be compatible with our target market, we place the right price. Yes, it does not end with choosing the right target market and having the assurance that there is market demand, because overpricing and underpricing may also affect the startup’s finances. Any inconsistency might lead to bankruptcy or any other less grave scenario similar to such circumstances.

2. They have the right team.

Startups or any other companies must embody this from the very beginning.

It is not sufficient that you find and create a team, but it is essential that you make it the right team because it’s all in there: synergy, collaboration, and the way you proactively help each other and divide the labor.

Having an unbalanced team, on one hand, may hamper a startup’s success. The right team, on the other hand, also sells well to investors. In this sense, the investors are assured that the startup knows what they are doing and that those stakeholders have nothing to worry about.

Who is responsible for making the team the right team? Everyone. It’s just like talking about sports. One member’s failure can affect the whole team. It’s not enough that you have individual exceptional players, but you have to mold it in a way that they perform better than their individual selves, which should be the main purpose of finding and creating a team in the first place.

This can be done through proper team composition based on each person’s capabilities and proper communication to establish the team’s foundations.

3. They never underestimate the competition.

Most startups and companies try to look their best in front of their competitors but in reality, any startup that says that they’re not afraid of their competitors can't be a good sign.

Ironically, one good aspect of a startup is the fact that they do not underestimate their competition. This puts into the thought that nobody should underestimate each other no matter how far ahead of your competitors your own startup may be, and the fact that being afraid of competition compels people in your team to do better; to always exceed the expectations and hypothetically, become number one.

Never underestimating competition also takes the form of studying and analyzing where a startup is currently positioned within the competing arena. It’s necessary to know how a startup is doing and it can be done so by knowing how the competitors are doing.

Reading the aspects that are making the competitors ahead of us and scrutinizing loopholes and places where a startup can do better is a good place to start. Through this, a startup is able to manage their business properly as well as maybe even be one step ahead of their competitors.

4. They have extraordinary ideas.

These successful startups do not just have unique ideas, but extraordinary ones.

Imagine thinking of a unique idea and turning it into an even more extraordinary idea. Ideas that exceed the knowledge ceiling and proactively create solutions to possible problems that the startup might encounter even before they encounter them are like a mattress to a falling business.

It absolutely helps that these ideas ensure that they’re pointing out a gap in problems and that these ideas fill those gaps.

In a fast-paced world, ideas eventually become outdated, while others start to become more ‘trendy’ than others.

Having extraordinary ideas mean that these ideas are always keeping up with the momentum of the real world. In the fashion world especially, they are always adapting to the needs and wants of their market.

This mindset creates ideal thinking about how the target market always changes and how startups must always assess how well they are doing with regard to their market’s demands.

A good way to be able to discern these changes and adaptation is looking into one’s own startup and examining whether there’s an improvement or ‘evolution’ in the startup’s performance. In this way, we assure ourselves that we are able to adapt our ideas from our target market.

5. They have great timing.

The most important aspect of startups is that they should be the piece to a missing puzzle in the real world.

These startups must be up to date and address certain societal gaps perfectly. In this time of the pandemic, for example, face mask companies are obviously a lot more profitable. To put things simply, that’s because they are present just when the crisis that calls the need for them came around.

Great timing is everything, and we should always ask ourselves: is our startup timely?

Timing is one of the things that could determine which direction a startup is leading. A lot of companies release products that do not answer a specific gap in the market. This is a risk that may be successful but usually ends in a disaster.

Ultimately, however, the best way to incorporate great timing is that not only should a startup be timely, it must also think ahead of its market.

Just when many companies were just thinking about the launch of the MP3 player, for example, Apple has already launched the iPod. This is a great example of more than being timely, they are also thinking ahead of their market and even their competitors.

With the proper timing, startups are able to overtake their competition and create a stronger playing field in their business.


The characteristics of successful startups are limitless, and a majority of its aspects are only compressed into these five reasons.

A startup may not perfectly have to embody all of these to become a success, because it is not always about executing strategies flawlessly. Instead, it is about initially going for the bare minimum and fine-tuning along the way. That is what most of these startups must accomplish first. After which, everything else will hopefully follow.

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