We’ve had a record breaking year at AdTonos, seeing 10x growth, we’ve doubled in terms of employees, and are expanding in the US (the biggest tech market globally) and throughout Europe. Behind today’s success were many setbacks, a lot of perseverance and a fair share of sacrifice. 1 in 3 startups started off with $10,000 or less in capital, and another third started off with less than $5,000. Over 75% of startups founders use personal funds in the early days to keep the business afloat. This once was AdTonos’ story.
Those that have never worked for, or have little exposure to startups may not appreciate just how much work goes into maintaining a successful startup, and how massive an achievement just surviving throughout a world pandemic really is. Around 69% of startups begin as home businesses, and AdTonos is no exception. Equipment costs for startups can range anywhere from $10,000 to $125,000, and many have to finance equipment out of pocket in the beginning. Of all industries, startups in tech had a failure rate of 63% in 2018, and 42% of new startups eventually fail because they don’t take the time to fully understand the market for their product or service. We are one of 6,220 active UK startups, and globally, only 3.3% of all startups are adtechs like us. Here are some more jaw-dropping statistics about startup failure:
- Only 40% of startups are able to become profitable.
- Only 2 in 5 startups will ever see a profit, while 1 in 3 break even and another third make losses.
- 9 in 10 startups ultimately fail; so far, we are among the 10% that survived!
- 20% of startups fail after their first year, 30% in two years, and 50% within five years; 6 years on, and things are still looking good for us!
- It can take up to six months for startups to attract and hire new talent; our team’s almost doubled in just one year.
- At least $50k in annual revenue is needed for most businesses to be sustainable; in our lowest months, we make over ten times that amount.
Tips for Success in the World of Startups
We’ve overcome many odds to get to where we are now, and there will always be new, exciting challenges to face and opportunities for growth in the future. What should existing or aspiring founders bare in mind when planning for their own business’ success?
Realistic Resource Management
Keeping costs down is important to any startup, but there is definitely a danger in underspending. Short-term penny-pinching can see teams spending less time on revenue generating activities or stakeholder engagement. The long-term cost of this could very well be the sustainability and success of the business, so it’s worth joining the 50% of small businesses that have a dedicated finance team.
Building and Incentivising Your Team
Soft skills like passion and being able to inspire people with your vision is more valuable than experience per se, as first time founders are 18% likely to succeed, whereas 20% of experienced founders are likely to succeed – a very small difference! Surveys also show that lower levels of passion and a lack of a collective vision was more of a determinant of failure than lots of prior experience in leadership teams! Research also shows that having multiple founders makes startups more likely to grow sustainably, enjoy three times more customer growth and are 30% more likely to secure investment from stakeholders.
Added to this, it’s important to bear in mind that startups created 2 million jobs in the U.S. alone, that US tech-based wages grew by 20% between 2007 to 2016, and the adtech market is valued at $30 billion. If your compensation and benefits pale in comparison to a competitor, this might be a push factor for your existing team, and retention is critical for growing businesses. The most successful businesses will be the same ones that create a work environment that everyone can thrive in, where they are valued and where they can grow.
Planning, Planning, Planning
Time and resource needs to be allocated to plan business operations meticulously. Whether that be the finer details of annual Gantt Charts for major projects, event planning, personalised marketing strategies or PR objectives. Creating space for planning weeds out inefficiencies and waste of resource. In turn, this allows teams to scope out award and recognition opportunities as well as future partnerships. It enables teams to regularly track progress and pivot where necessary. Personalized marketing is integral to startup success, as are well-timed partnerships and pitches; saying the right things to the right people but at the wrong time can be as damaging to the business as failure to act in the first place.
November is International Enterpreneurship Month; if you enjoyed this blog, keep an eye open for more blogs on all things enterprise next month!