What start-ups need to scale and succeed
Statistically, the odds against a start-up are formidable. Companies that emphasize talent, customer-centricity, and core principles are the ones most likely to succeed.
By James Bilefield – Most start-ups have one thing in common: they usually fail. But the minority who beat the odds and survive share a number of traits. From the outset, they work incredibly hard and move extraordinarily fast to attract early customers, great talent, and additional funding. Once they begin to scale, successful start-ups maintain their momentum, respond quickly to market changes, and remain focused on outcomes and delivering value to customers. Digital entrepreneur James Bilefield shares his start-up insights with McKinsey’s Philipp Hillenbrand.
Philipp Hillenbrand: We always hear that start-ups need to operate at an incredible pace, that speed is everything, and if they slow down, they die. Is this just a cliché, simply a function of entrepreneurial impatience, or actually true?
James Bilefield: The data show that the overwhelming majority of start-ups fail. Some fail fast, while some fail over a longer period of time in markets where funding is usually finite.
To overcome those extraordinary odds, an unusual amount of speed, hard work, and agility is required by the founders and first employees to rapidly develop the business and achieve enough momentum to delight initial customers, attract great talent, and secure further funding. The impatience you highlight is more about ambition, competitive instincts, and, ultimately, survival.
Philipp Hillenbrand: It’s much easier to get off to a running start when you’re small. How did you manage to sustain or even accelerate the velocity while Skype was expanding?
James Bilefield: At Skype, we were on a simple but extraordinary mission—to let the world talk for free and change the face of global communications. Initially, we hired a diverse set of mavericks who really shared our excitement and energy. As we scaled, we strove to ensure that our unique culture and values stayed strong. And thanks to our flat and nimble management style, we maintained a clear focus on outcomes and an obsession on delivering for customers. more>