The high failure rate in the early years is often attributed to many different factors, but the biggest one has to be the founder's mindset. The Success or failure of any business heavily relies on its founder.
The startup world can be tough. According to statistics, about 20% of new businesses don’t make it past the first two years, and around 45% don’t survive beyond five years. It’s a challenging journey, but those who make it often have some incredible stories to tell.The high failure rate in the early years is often attributed to many different factors, but the biggest one has to be the founder’s mindset. The Success or failure of any business heavily relies on its founder.
So, in the face of this failure threat on startups, what are the lessons a founder can adopt to strengthen the chances of success?
This Founders Friday, we explore 5 strengths of different business cultures that startup founders can adopt:
1. Japanese Kaizen: Continuous Improvement
Kaizen in Japanese is the philosophy of continuous improvement. Looking at it from a startup perspective, It involves making small, incremental changes to processes, products, or services to enhance efficiency and quality.
The first product or service you launch as a startup will not be perfect, that is a guarantee. However, adopting Kaizen mindset is implementing a culture of constant reflection, learning from mistakes and improving within the startup. Encourage your team to identify and address inefficiencies.
The perfectionism trap holds back many founders from testing, trying and launching what could be the best products of their startup.
2. The TPS Culture: Muda, Mura, Muri
Muda refers to waste, or processes that don’t add value. These types of waste do not help your business or workers in any way. They increase costs and make tasks take much longer than they should. Value-added work is a process that adds value to the product or service that the customer is willing to pay for.
Mura means unevenness, non-uniformity, irregularity, and variability. This is the reason for the existence of any waste. The Japanese approach seeks to eliminate the causes of irregularities and not hide them with buffers.
Muri means overburden, beyond one’s power, excessiveness or unreasonableness. In human labor terms, Muri is about the physical overload, the hardship, and exposure to mental stress, which lead to wasting energy, health and ultimately human capital.
Muri also exists when machines or operators are utilized for more than 100% capability to complete a task or in an unsustainable way. Over a period of time, this can result in employee absenteeism, illness, and breakdowns of machines.
The elimination of waste (muda), unevenness (mura), and overburden (muri) is crucial for efficiency. Analyze and streamline processes to eliminate unnecessary steps, uneven workloads, and excessive demands on resources.
3. Silicon Valley Culture: Innovation and Risk-taking
This specific Silicon Valley culture has created an environment that has fueled the growth of numerous tech giants.
Constant focus on innovation and a willingness to take calculated risks can lead to groundbreaking products or services. Encourage a culture where experimentation and learning from failures are valued.
4. Scandinavian Culture: Work-life Balance
As a startup founder, you are often both the CEO and the employee of your startup. Thus, work-life balance is more often than not a far off dream. However, it is crucial not to forget its importance.
Prioritizing work-life balance and flexibility can lead to increased well-being, with its ripple effect being productivity.
Work-life balance also applies to the team in your startup;The employees and stakeholders. Implement flexible work hours, remote work options, and policies that support a healthy work-life balance to gain maximum productivity.
5. Lean Startup Culture: Agility and adaptability
If there is one skill to master that will save your startup, it is pivoting. The economic stability, industry setup and startup space are all quite dynamic. The ability to pivot quickly and adapt to changing market conditions can be a key competitive advantage.
By fostering a culture of responsiveness to customer feedback and market research, you as a founder can tell when it is time to pivot and align your business structure, your systems or products with the current environment.
Rigidity kills a startup faster than lack of funding would.