Most successful founders will think back on their early days and tell you that launching a startup takes passion. They're right, of course, but something that's less likely to feature prominently in their memories is the preparation. Before you take off in an airplane, there's a long, unsexy checklist of seemingly mundane items to double-check. Many appear obvious (did you remove the wheel blocks?), but overlooking them can be catastrophic.
By definition, every entrepreneur wants to start a business, but the tough reality is that more than half of startups will fail before their fifth year. Rushing in will skew that percentage further and in the wrong direction. You probably can't turn a long shot into a safe bet, but you can certainly take basic steps to give yourself a few additional advantages. Improve your odds by taking a crash course in these three vital areas.
1. Economics and finance
Financial models and analyses are rarely the focus of early-stage startups. In fact, because financial hires are typically made much later on, it's possible for startups to become well-established without ever looking closely at their unit economics--that is, the per-unit look at the direct revenues and costs associated with your business model. In the worst-case scenario, that could result in negative unit economics, where a startup burns through funding faster with every additional product it sells.
You can avoid this dire situation with a crash course in economics and finance. Options abound, from accelerator and incubator programs that offer financial mentorship to workshops or even a class at a local university. You don't need a master's degree to launch your startup, but you do need a firm grasp on the basics of finance. Knowing how to construct financial models and how your decisions affect these models will set you up for long-term startup success.
2. Data analytics
Far too many companies collect data for its own sake or because that's what their competitors are doing. Instead, data should be a tool for testing some hypothesis you have about your business, your customers, your product, etc. Data will either validate your assumption or prove it wrong, but either way, you gain valuable insights. For instance, luxury brand Shinola originally designed its Vinton watch for women, but the company's research showed that it was received just as well by men. With a product that all customers found appealing, the company opted to invest more in production of the watch.
What you shouldn't do is collect data and hope that something valuable will emerge on its own. Not sure where to start demystifying data? There are plenty of free courses available online that will allow you to get started without becoming overwhelmed.
The number of cyber attacks is constantly on the rise, and the threat will only grow as your startup accumulates more data worth stealing. One of the biggest problems in the cybersecurity realm is the low cost of conducting attacks. Even unskilled hackers can now target large companies thanks to the spread of sophisticated hacking tools such as AutoSploit, which can automatically identify and compromise insecure internet-connected devices. Fortunately, new technology is emerging that can help.
Speaking at the 2018 NCC National Cyber Symposium, National Cybersecurity Center CEO Vance Brown expressed the hope that blockchain could be used to decentralize information, transforming security and making it more expensive to conduct attacks than to defend against them. In a field that evolves as rapidly as cybersecurity, taking a course won't be enough--the knowledge you gain could be outdated in as little as a few months. Instead, follow the most established security professionals on social media to keep up with cybersecurity trends and developments. You can also sign up for a security newsletter, which will enable you to stay on top of the latest happenings in just a few minutes each day.
You're eager to launch your startup, but it's always a good idea to look before you leap. Know how these three major areas will impact your future success and study up on each of them to improve the outlook for your business. When you're neck deep in running your startup and struggling to find time to eat or sleep, you'll be glad you did this homework ahead of time.