Plotting the Course for Start-up Success

by Pranav Ramesh
November 01, 2022

Sometime around 2010, Joel Gascoigne had the idea to schedule social media posts in advance. He and a group of friends developed an app called Buffer that would allow just that. After Buffer launched and Joel saw that others were interested in such a service, he incorporated and took his software mainstream.  

Joel followed a textbook formula for a startup. He discovered a problem, created a solution, and monetized that solution because there was a demand. He also understood that not every tech startup will become a tech giant like Google or Facebook. Rather, twelve years after its initial launch, Buffer is still a small business. With just over eighty employees, it manages almost five million registered users and brings in roughly $16 million a year.  

There are approximately 1.35 million tech startups currently operating around the globe. Nearly 90% of those will most likely fail, many within the first two years. But don’t let that number discourage you. Information can be just as important of a resource as money. Understanding some of the reasons why tech startups fail can help you have a greater chance of success. Read on to learn about three common pitfalls and solutions that are relevant to nearly all startups.  

And who knows? Maybe your startup will be one of the twenty tech companies in the US to defy the odds and reach $100 million in revenue each year! 

Pitfall #1: Going it alone – Consider a technical co-founder 

Just because you can create a startup doesn’t mean you bring all the expertise needed to the table. One of the first hires you should consider is a technical co-founder. A technical co-founder is someone who brings hard technical skills specific to your startup or compliments areas you lack. They can help turn an idea into reality, launch your product into the market, help scale up production, or ensure compliance with industry regulations. Regardless of which skill they bring to the table, technical co-founders can help your startup perform up to 230% better than going without one.  

Another benefit of having a co-founder is funding. Solo founders have a harder time securing seed money, with team founders outperforming solo founders by over 150%. And if your co-founder has previous success in startups, all the better, as investors prefer to back someone with a history of success.  

Pitfall #2: Hiring mishaps – Consider using a recruiter service 

As you transition from ideation into research and development, and later into launch and scaling, your needs and infrastructure will change and expand. It is important to recognize not only what talent and skills you need but when you need them. Hiring too quickly could lead to bloated payrolls early on that drain much-needed capital. Hiring too late could let competitors get ahead. It is a delicate balancing act that varies depending on the needs of your startup and the expectations of your investors. 

Two things common to all startups, however, are the importance of sourcing the right talent and the time-consuming nature of hiring. As the technology sector becomes increasingly niche, finding the right talent with the right skills can