By Daniel Novitzkas
Specno was founded on a mission to launch a million startups with a few tips to help that vision become a reality, and not a Greek tragedy.
There’s an interesting stat about the much-vaunted Forbes 30 under 30 lists: they’ve collectively raised nearly $5.5 billion (R101.5bn) in funding, but between Charlie Javice, Sam Bankman-Fried and Martin Shkreli – and if you count Elizabeth Holmes – the alumni have been prosecuted for almost four times that in fraud.
It gets even more interesting when you look at the founder trends. Harvard Business Review pegged the average age of successful founders at 45 in 2018. Data inferred from more recent US Census Bureau statistics put that age at 42 in 2023.
But while the myth of the under-30 business success has been thoroughly debunked – even wunderkind Bill Gates ploughed a decade of his life into Microsoft before unlocking billionaire status at 31 – founders are reaching success at younger ages than ever before.
Don’t put too much pressure on yourself
There’s a common problem among new founders where they create artificial deadlines and put themselves under pressure to achieve more than what is realistically possible. That puts them into a position where they are building a weak foundation, when in reality those first few years are an opportunity to keep things incredibly lean.
This tracks with failure trends. About 90% of startups fail, but 10% do so within the first year. That goes up to 20% if you follow US official department of labour numbers.
What is surprising though is that financial problems don’t crack the top three when founders are polled for the reason for failure. Getting funding for businesses is the easy part, and the problems occur when the product market fit is off or when the team doesn’t gel.
Don’t worry about granular details
Investors aren’t putting money behind the product, they are investing in your ability to build.
At that early stage it’s about doing things that don’t scale to prove that there is a market for systems that can scale. Early-stage investors really only care about the founder’s ability to survive.
Building a startup is a narrative where you build a plan backwards from your vision to where you are today, and then execute on that story.
These words feed into the Bill Gates adage of underestimating what you can achieve in a decade and the inverse overestimation of what a business can achieve in a single calendar year. The challenge laid down by both entrepreneurs is to dream big and sell that dream to your team and investors.
Once a business has backing – skills or funding – then it’s time to iron out the wrinkles and put the money to work in realising that dream.
Hire people who complement your weaknesses
Having the personal insight to know your blind spots is an important skill for any entrepreneur. You can only challenge your assumptions by surrounding yourself with experience and expertise in the areas where you don’t.
Be very selective about the people you have on board at the start, because it will heavily influence the future of your business. If you have the opportunity to assemble a team in the early stages, get people who have experience working on what you actually want to build.
Unlock the most potential for your business
Number two on the list of reasons for start-up failures is marketing problems and it accounts for more than 20% of reasons given. This shows again that funding is not the biggest challenge for startups because investors will flock to legitimate business opportunities.
What sinks a huge percentage of businesses is a low rate of value unlock, which makes it imperative to partner with people who can bring value to your organisation.
Find someone who is a domain expert and has connections to clients and investors, it doesn’t need to be your friend but it needs to be someone you can work with on the project.
Any door that can be opened for your business is an opportunity to enter a new market or unlock a new form of support for your business journey.
Don’t rush the process
It is natural to envy the success of the young entrepreneurs who have made it big, but business is about trust, and it takes time to develop that trust. Over a third of start-ups fail because of misreading the market demand – a major contributing factor to the catch-all term product-market fit.
Market research takes time to do it correctly and even then, most businesses fail between year two and five, when the systems are scaling fast.
Rather take a few years at the start to learn what you want to build, who you are building it for, and who you want to build it with. It’s not instinctual for founders to slow down growth to learn, but it is better than scaling too quick and not having the time to learn the things that will take your business to the next phase.
Aspiring to be on the 30-under-30 list is great, but the cost can be huge if you try to cheat the system. Not everyone is going to make it, but the pace of success is always steady.
Daniel Novitzkas is the CEO and co-founder of Specno. Specno is a leading software and design agency known for its innovative approach to building successful tech ventures. With an ambition to be the global leader in venture building, Specno has proven its competence by ranking as the number one agency in South Africa and the 30th globally on Clutch.co. Specno is committed to achieving its mission of helping one million entrepreneurs build a tech-enabled business by 2030.
BUSINESS REPORT