It’s a well-established fact that startups face an uphill battle when it comes to achieving success. In fact, as per CB Insights, startup failure rates have increased in recent years. And while there are many factors that can contribute to a startup’s demise, one of the most important which gets missed is startup effectiveness.
Effectiveness is basically the ability to produce the desired result. And for startups, the desired result is usually creating customer value & capturing it (profitability). But achieving both of these, is an iterative & synchronized process between 3 key attributes – Leadership & Culture, Network & Partnerships, and Change readiness. In fact, going beyond certain thresholds & constantly iterating to improve on these attributes generally results in improved product/market fit, customer acquisition, and operational efficiency.
Key Attributes of Startup Effectiveness:
- Leadership & Culture: This attribute measures the proactive & adaptive capacity of a startup created by its Leadership & Culture. Within it, it includes sub-attributes of Leadership, Employee Engagement, Decision Making, Innovation & Creative Problem solving, & Situational Awareness.
- Network & Partnership: This attribute measures the internal & external relationships fostered and cultivated by the Startup to leverage its endeavors. Within it, it includes sub-attributes of Effective Partnerships, Knowledge Leverages, Breaking the Silos & building internal capabilities & capacities.
- Change Readiness: This attribute measures the direction, alignment, cascading it across the organization, along with culture to enable the startup to be change ready. Within it, it includes sub-attributes of Purpose, Proactive postures, Planning & Strategy, & Stress testing plans
Why measuring effectiveness for startups is critical?
Startups typically have limited resources. This means they can’t afford to waste time or money on activities that don’t directly contribute to their bottom line. Second, startups have a limited window of opportunity to make an impact. They need to be able to hit the ground running and quickly scale their business in order to stay ahead of the competition.
Why is being an effective startup so important?
The simple answer is that it allows you to achieve your goals quicker and with less wasted effort. But there is more to it than that. Being an effective startup also gives you a competitive advantage. In the hyper-competitive world, the ability to move quickly and efficiently towards your goals can be the difference between success and failure.
Take The Brew’s Startup Effectiveness Index to measure & improve your startup’s effectiveness.