Will Your Startup Fail in the Next 6 Months?
Why Do Startups Fail?
For every reason you can think of, and many more you can’t. If you’re starting a startup, the deck is stacked against you. If you’re not too early, you’re too late. If you don’t grow too fast, you’re growing too slowly.
Some of the smartest, hardest working founders fail. Brains and work ethic can’t always save you.
Okay, Now Give me the Bad News
90% of startups fail. That’s a fact of life, but it’s not a law of nature. Startup death is unrelenting, but not random.
The truth is, after 51 startups at StartupYard, and 29 companies accelerated since we took on a global focus, we’ve seen that there is one thing that kills startups dead faster than anything else.
It’s the failure to answer one simple question:
Where am I going to be in Six Months?
That may seem like an easy question. But it isn’t.
Startups that ask themselves this question, in a searching and honest manner, tend to do better –much better- than those that don’t.
Startups that survive don’t always know the answer to the Six-Month Question. But they do ask it. And they ask it all the time.
The Six-Month question is so important because failing to think about the consequences of your short term decisions is the fastest and easiest way to make stupid mistakes. It is the best way to waste your own time and energy.
If I take this decision today, whatever it may be, where will I then be in six months?
Everything You Do is a Choice
Acting is a choice. And failing to act is also a choice. When a door opens, you either go through it, or you close it. So ask yourself what will happen if you do either.
Consider someone who’s thinking about applying to StartupYard. This founder is faced with 3 possible answers to the six-month question.
- Option One: Apply and Be Rejected
- Total time invested: 2-3 hours (8 hours for finalists)
- Potential risk: Minimal.
- Damage your ego
- Waste a day
- Damage your ego
- Potential benefit: Meet and get feedback from the region’s leading investors, and top StartupYard mentors
- Side benefits:
- spend 2-3 hours building a compelling application for any accelerator (not just StartupYard), and getting qualified feedback. Good for use with other investors as well.
- Learn how accelerators work. Make contacts with investors and mentors you can use later.
- spend 2-3 hours building a compelling application for any accelerator (not just StartupYard), and getting qualified feedback. Good for use with other investors as well.
- Where you’ll be: either on to your next venture, or continuing to use the feedback you gained by applying.
- Total time invested: 2-3 hours (8 hours for finalists)
- Option Two: Apply and Be Accepted
- Total Time invested: 3 months
- Potential risk: Minimal.
- Maybe launch slightly later than planned (but with a better strategy).
- Be forced to focus on the business instead of the product.
- Injured ego due to challenging feedback. A few unproductive mentor meetings (unavoidable).
- Maybe launch slightly later than planned (but with a better strategy).
- Potential Benefits
- Make partnerships and sign customers you wouldn’t have access to otherwise (at least not this early).
- Get in-depth feedback from top industry mentors on your product before launching.
- Launch with the support of influential corporate partners.
- Gain investment faster than you could have on your own, with more founder-friendly terms and better positioned investors.
- Make partnerships and sign customers you wouldn’t have access to otherwise (at least not this early).
- Side Benefits: Grow personally and professionally in a challenging environment, and force yourself to apply discipline to your business plan and product/market positioning.
- Side Benefits
- A perk package worth over $1m, seed investment of €30K, and possibility of follow-on funding.
- Access to StartupYard’s mentor network for the life of your company.
- PR benefits of taking part in one of Europe’s best regarded accelerators
- A strong negotiating partner in StartupYard, that can help you get the best possible terms from future investors.
- A community of fellow founders who can become your support network for years to come.
- A perk package worth over $1m, seed investment of €30K, and possibility of follow-on funding.
- Where you’ll be: Hopefully launched, funded, and growing. StartupYard startups who have raised funding since 2013 have secured, on average, €400K after the program. Over half of our alumni have been either funded, or acquired.
- Total Time invested: 3 months
- Option 3: Don’t Apply
- Total Time Invested: 0 Hours
- Potential Risk:
- Pass up all benefits of options 1 & 2.
- Increased risk of not closing investments and dying early
- Increased risk of launching the wrong product – or focusing on the wrong market.
- Increased costs of starting up (both in time and money).
- Be forced to deal with investors who are not a good fit for your vision; who don’t offer friendly terms.
- Pass up all benefits of options 1 & 2.
- Potential Benefits:
- Launch slightly earlier. Maybe.
- Nobody bothers you.
- You are in total control.
- Launch slightly earlier. Maybe.
- Side Benefits: None
- Where you’ll be: Unknown. Statistically, likely dead.
- Total Time Invested: 0 Hours
And Then What?
Perhaps my breakdown is slightly skewed in our favor. But this comes from a depth of experience.
The six-month question is a vital part of what StartupYard does for our founders. The program focuses founders on achieving results that they can build upon. Constantly, they are challenged to answer: and then what?
You launch the beta: and then what? You close this investment: and then what?
Startups that have joined StartupYard after pondering option 3 have been some of StartupYard’s most successful to date. Companies like Rossum.ai, Neuron Soundware, and TeskaLabs all initially suspected that the program would be a waste of their collective time and energy.
Each has subsequently become a major proponent of StartupYard and of acceleration in general.
Where were they after 6 months?
TeskaLabs joined TechStars and raised a seed round for their IoT security platform within 6 months of attending StartupYard. They now have active customers like O2 and is a Cisco Solution Provider. The company is now based in London.
Neuron Soundware won Vodafone’s “Idea of the Year” within six months of attending StartupYard, and closed partnerships with Siemens and other major industry players. They raised seed investment less than a year later.
Rossum.ai raised investment on the final day of the StartupYard program, and were named (along with Neuron Soundware), among Forbes’ top 10 Czech startups in 2017- less than six months after joining StartupYard.
Do You Know Where You’ll be in Six Months?
If you know what you’re going to accomplish in the next six months, more power to you. I hope you do well.
But if you’re like most founders, you don’t know. You don’t know what your options are going to be; what opportunities you will have 6 months from now. You probably don’t have a reasonable, reliable way of checking to see if those plans are realistic.
And if you don’t, then ask yourself again: what can I do about that? What decision can I make today that will change that uncertainty?
I have one suggestion: apply to an accelerator. StartupYard closes our applications for Batch 8 on Friday night (June 30th), at Midnight.
Hurry up – it’s not too late.
You can now apply for StartupYard Batch #8.
- Robots
- Artificial Intelligence
- VR/AR
- IoT
- Cryptography
- Blockchain
