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Start-Ups

As per data provided by the US Small Business Administration, half the startups that began in 2011 have already died down while about twenty percent of those founded in 2014 did not even complete a year. A lot of MBA students wrongly assume that disruptive technology is the only way forward for a startup to thrive. There are several reasons why a startup may not survive. The most common factor as provided post business analytics done by CB Insights is that they do not serve any existing market need. Another major reason is the fact that they quickly run out of funds. Their cash flow models are not efficiently run, and not every startup gets a handsome seed fund to begin with. The inability to assemble together a proper team is the third common reason for failure cited. Another is excessive competition. When one startup does well in any field, or any idea catches up, several others try to pounce in, often with limited results. Finally, it has been observed that startups wind up due to pricing issues. This is different from funding as a lot of new business entrants keep entry prices lower than market rate to attract projects. These get unsustainable in the long run.

Source:https://www.forbes.com/sites/sageworks/2017/05/14/why-startups-fail-and-how-to-avoid-failure/#2964ae19a3b9

Uploaded Date: 20th May 2017

A lot of youngsters are more open these days to working for startups instead of large established corporations. Thus startups must also plan early on how to get the best of talent and then create a pipeline for the same. Proper talent management systems must be created right from the outset. The recruitment must be done with clear set timelines, rather than just thinking of surviving the day or the business quarter. An assessment must be made of the skills the recruiter is looking for. For youngsters looking to grow, a startup can at times be a hurdle, so clear growth paths must be designed. A mistake lot of company founders commit is to recruit people who have similar personalities to themselves. Instead people with complementary skills must be selected to complete the organization and help it grow beyond the founder’s vision alone. At times, the pipeline will need to get pruned as a lot of non-performers will also exist. Unlike the luxury of any established firms, startups must without delay execute this function.

Source:https://www.forbes.com/sites/roncarucci/2017/05/09/how-to-scale-your-startup-with-the-best-talent/#705564753a05

Uploaded Date: 16th May 2017

After the first three years of any startup, a crucial period emerges where the founder’s innovation and corporate strategy are less important than the funds available to the organization. It is at this stage, that the founder needs to decide how much power and control to retain within the firm. Increased funding from investors naturally leads to reduction in control, although this gets necessary. Studies have in fact found out that per additional role that founders retain such as both chairman and CEO, the company value reduces by between seventeen and twenty two percent. Additionally, there is a whopping thirty five to fifty one percent reduction in the ability to attract financing. Investors however need to conduct a detailed due diligence as replacing a charismatic company founder too early may have negative implications for its brand image.

Source:https://www.strategy-business.com/blog/For-Startups-Giving-Up-Control-Is-Key-to-Creating-Value?

Uploaded Date: 16th May 2017

The internet has completely changed the way startups operate. One of the major changes observed has been the almost negligible amount of audit that startups are required before putting themselves up for IPOs. An example of this negligence is Twitter’s IPO. Twitter’s customer base was heavily populated by bots or robots. Companies didn’t initially realize and Twitter gained traction through a successful IPO. Thus its claim to be a major platform for digital marketing came unstuck when post its IPO, the fraud was detected and the value of its shares came down. Facebook on the other hand has gained greater credibility due to the authenticity of its claims. Uber is another startup that will face challenges to justify its massive valuation in the face of competition from the likes of Lyft, Curb and Juno.

Source:https://www.forbes.com/sites/quora/2017/05/05/how-the-internet-is-changing-the-world-of-startups/#57e97de443fc

Uploaded Date: 16th May 2017

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