Startup Success Factors
I currently work for the startup Mint.com most of my waking life, and as they say, “I’m in it, to win it.” I’m a fierce competitor whether it’s soccer or business, and I joined Mint because I felt we had the right seeds in place, and I continue to work hard there in the key ways I can to ensure success.
Here’s why I think we can win, and hopefully these points will help motivate you in your business, or if you are looking to start one, find a great market opportunity that will attract the best and brightest to your cause:
1. A simple and trend-proof idea.
Call me East Coast, but, the elevator pitch is, ‘the best way to manage your money.’ Simple, solves a problem, no jargon. I in part checked my ego at the door when I joined because I abandoned my own business plan, and for the first time ever, stepped into a company where I wasn’t a founder. My own concept had an acquisition hurdle– namely being ineffectual without a critical mass of customers, it was a technology without a process, and it was in a crowded market that even I was sick of being pitched for. Mint wasn’t.
2. It doesn’t rely on adoption by your friends.
Facebook doesn’t work without the community. Many successful businesses are social networks, but for every one you’ve heard of, there are 100 that you haven’t; the reason being that it isn’t easy to rely purely on organic growth. All else being equal, I’d place my money on something that doesn’t need The Graph to work. Social networking type sites only work if your friends use them, and like everything social, what’s hot now might not be hot 5 or 10 years from now. Bonus: Mint is still recession proof, and probably recession positive.
3. Unlimited and constantly renewable market.
Unless you’re living off the land in the wilderness, or capitalism ends, money management is something that you need to do if you’re interested in living the way you want to live. Every year more students graduate into the workforce and will need a product like ours. We aren’t going after a niche market that’s expensive to reach. The global standard of living and number of consumers is also rising, and as Mint goes international, we tap into that as well.
4. Information advantage.
At Mint your information is completely anonymous to us, but we track aggregated data–the big picture. In our case: billions of dollars in financial transactions. This data cannot be created overnight, it is incredibly defensible. We know how much is being spent where. It’s not hard to imagine the applications for our customers.
5. Poor brand value among competitors creates an opportunity.
The people I talk to generally get a bad taste in their mouth whenever Quicken is mentioned. Quicken is perceived as time consuming, boring, old, and more like a chore than anything else, akin to doing your taxes. Quicken has high brand recognition, but so does Microsoft– ironically the other major player in the space. Neither elicits a lot of positive emotion lately.
6. Win-win monetization
MySpace’s monetization scheme is incongruous with what I’m going to the site to do, socialize. They are making money, but that model would make me nervous. Who clicks these ads? Let’s make the monetization align with what I want to do. Monster makes money but you have to pay whether you’re successful in hiring or not. No hires leave a bad taste. eBay charges listing fees regardless of whether you sell or not. (My last experience with eBay was my last.) Let’s add making the customer happy to the equation: Google. The ads are clearly marked and are helpful, any retailer you like purchasing from is another example. Let’s take it a step further and pay the company and customers– Mint. Mint shows you specifically how you can save $xxx, and only when you ask for it. Mint may make $50 on a referral that the user makes $1,000 a year on. That’s a happy customer with a positive brand experience with Mint.
7. A visionary founder.
An engineer as CEO tends to raise the red flags of more risk-averse investors out there, or maybe that’s also an East Coast thing, but you can’t argue with Aaron Patzer–a founder who has a long-term year-by-year realistic vision and a clear plan for how to achieve success without relying on a single linchpin success factor. He’s raised three rounds of funding. Two founders that fit the profile? Steve Jobs and Bill Gates.
