I’ve heard people wonder if we’re in a bubble with regard to startups. Is it as bad as the 2000 dot-com bubble? Might it actually be worse? I thought it would be worthwhile to look at the available data to see if we can figure this out with more than just a personal opinion. So I asked our engineering team at Google Ventures to dig into the bubble question and find out what the data say. In this post, I’ll share what I learned.
Back in the late 1990s, venture capitalists got very excited about the Internet. A whole lot of money was poured into some companies that failed rather spectacularly, and a lot of people lost a lot of money.
Fast forward to 2015. If you read the headlines about multi-billion-dollar valuations for companies like Uber (one of our portfolio companies), Airbnb and Dropbox, it’s easy to see why some people are feeling antsy. Is everyone irrationally excited about new platforms and economic models in the same way folks were excited in 1999? Or is this different? There are two sides to the case.
Women cradle newborn babies in their arms and dangle soft toys in front of older infants on colorful mattresses, all in a room in a Tel Aviv high-rise strewn with strollers and oversized bean bags.
It’s not a play facility. It’s the location of Google Inc. (GOOG)’s first baby-friendly school for startups. Called Campus for Moms, the program involves a series of nine weekly classes designed to give women on maternity leave a boost toward opening their own ventures in a country whose economy is dependent on innovation.
“The course helped me realize that this is who I am,” said Nira Sheleg, a 37-year-old mother of two who founded Wizer.me, a teacher-resource company, during the program. “I am an entrepreneur, not just a mom with an idea. Now I have a support group, and the mothers around me are amazing.”
Forget about the politicians in Washington and don’t count on Corporate America to get our struggling economy going — it’s America’s entrepreneurs that will prove to be the saviors. American entrepreneurs, through their creativity, innovation, and willingness to embrace risk, are the real engines that power our economy.
So often we look to the huge, multinational corporations as the drivers and guardians of our economy when the truth is the millions of small businesses across America deserve the credit. A strong, vibrant economy is the result of America’s entrepreneurs embracing the risk of self-reliance and venturing out to create their own opportunities. New small business startups create over three million new jobs each year. The solution to getting this country back on its feet and moving in a positive direction won’t happen because of the government. It requires the fruitful minds and determined drive of everyday citizens who enthusiastically embrace risk and begin the entrepreneurial journey.
Want to be part of the solution? Here are four ways that entrepreneurs can help revitalize our sagging economy:
Why do some start-ups 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 other 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 start-ups 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 start-ups 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.
While many startup businesses are filled with bright-eyed company evangelicals, the reality is that the odds are against you. Harvard Business School researcher Shikhar Ghosh found that 75 percent of all startups fail, which means that new companies have to rise up with caution if they plan to survive the first few years. This translates to running on a budget even when your productivity and sales are booming, ignoring deadly business fads, and taking fewer risks.
These dire statistics shouldn’t scare entrepreneurs away from new business ventures, but they should help us rethink our current approach to startup management. With new tech companies blossoming and wilting in cities like San Francisco, Seattle, and Cambridge, it’s easy for startup founders to get discouraged. Take a look at these massive mistakes new companies make and learn to avoid them early.
The changes mean small business owners borrowing $150,000 will no longer have to come up with $2,550 in upfront fees at the time the loan closes.
We are coming up on a decade in our own business. We have worked with thousands of clients and many times that number of prospects. As independent business people, our survival depends on our ability to forecast and close work. We have a very high close rate once we’re presenting, especially in person. This has been achieved through careful study of human nature and at a high cost.
As a consultant, you need to make the prospecting cycle as tight as possible so you are not chasing leads that won’t go anywhere. We began to experience greater success when we understood the following principle: Most people can’t say no.
I don’t mean this in the sense that they will buy from you if you overcome objections or demonstrate value. Most prospects know very quickly if they see value in what you’re doing and will buy. Our experience has been the best engagements result from connections that form quickly or, if there are delays because of a competitive procurement process, you are continually building a tighter relationship as it goes on. Absent this, you are likely waiting for a ‘no’.
The reason for this, my partner and I believe, is that most people hate the idea of rejection and hence are hesitant to do it to other people. I, for one, appreciate having my attention and effort liberated by a firm ‘no’. I am now free to begin the hunt for a new client, sometimes with lessons learned. But the slow ‘no’, or worse, the ‘we’re thinking about it’ just takes up mental and emotional cycles that are better spent elsewhere.