How Do You Know When a Startup Will be Successful

With the new year upon us, and many new startups being formed, one question that is on many new entrepreneurs’ minds is “how do you know when a startup will be successful?” Making the leap to even start a company is so difficult for many people, partly because of all the unknowns, and partly because the chance of failure is so high. The allure of entrepreneurship is powerful with the idea of a meritocracy and the ability to control your own destiny.

For me, there wasn’t a particular aha moment when I knew my startup was going to be successful (I’ve started two companies that meet my definition of a successful business), but in hindsight there were some strong indicators, of which here are a few:

  • Revenue and sales got significantly ahead of our hiring pace
  • The customer acquisition process started to appear repeatable
  • I could go on vacation for two weeks, not worry at all about the business, and come back with things being even better than when I left
  • We had sufficient levels of depth and maturity in each department whereby the department managers could take vacation and everything was fine
  • Each department was truly operating at a high level and doing great things (we were firing on all cylinders)
  • Customer compliments were outnumbering customer complaints 10-1

Success appears in so many different forms that it’s hard at times to appreciate the milestones. Knowing a startup will be successful doesn’t happen quickly, but over time it becomes readily apparent.

What else? What are some other ways you know when a startup will be successful?

3 thoughts on “How Do You Know When a Startup Will be Successful

  1. Great post.

    At Scoutmob – in the earliest days – our biggest indicators that we were going to be successful were (a) revenue was constantly ahead of our expectations (and, therefore, hiring), (b) consumer feedback was overwhelmingly positive & (c) new consumer sign-ups grew quickly without paid methods.

    Another point worth making is that we didn’t have to convince ourselves that small signs were indicators of success. Like most entrepreneurs, I’ve been involved in startups that didn’t work well and it’s very different. Growing a new business is difficult, but ones that don’t work always seem to be an uphill battle…nothing gets easier. When something is working, some part of the equation (eg customer acquisition) really works well and makes-up for all the other difficult parts of a new venture.

    Everyone is passionate about their new venture. Knowing the difference between valid & invalid indicators of success is very difficult.

  2. Depends on how you define success – I have been doing start ups since 1973, the first a victim of the then energy crisis. And, starting at it again, nothing but start ups since 1980. It’s never been easy but always exciting and rewarding one way or another. I am now on my fifth start up since i retired and I need some help – I have run out of money but not desire. Nothing short of changing the world in a meaningful way. – can you help – needs to get to market.

  3. I believe a core community of active users of a product or service is essential. Once there are some pioneers using the service, you have a proven concept and a base to expand on.


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