64% of early stage companies fail in the first 18 months. How to prevent your early stage company from being a static
Having a great idea with an even greater Total Addressable Market (TAM) and a healthy infusion by investors would normally set the stage for your company to be well on its way to glory. We know however, if that were the case, over 50% of early stage companies wouldn’t fail in the time they do.
What is the fundamental reason for this abysmal failure rate? According to CBInsights’ analytics, the number one reason is the quality of planning and execution among these companies. 80% of failures are caused by a lack of solid planning and execution. However, most companies realize this, too far down the road and many times, it’s too late to implement a rollback.
Top 20 Reasons Startups Fail
So, what if companies had:
- Clear insight into where they stand as a business internally and the eco systems they exist in?
- The ability to know how each leader within the company is aligned/misaligned with her/his peers?
- A clear way to predict probability of success towards achieving their objectives in the next quarter (Not the next year)?
- A clear set of ACTIONABLE insights to drive up the probability of success towards these objectives?
The opportunity to have insights like the ones listed above could make all the difference between exponential success and failure. Companies, especially early stage ones need mechanisms to assess where they stand more frequently than larger players. Early stage companies particularly need to assess themselves quarterly at first and after 3-5 years, semi-annually.
An assessment shouldn’t merely indicate where a company stands in its maturity and growth but also track its journey and progress over time. It should provide key indicators such as the probability of success in achieving major objectives of the company in the next quarter. This allows the leadership of the company to make small, incremental changes and improvements versus facing the prospect of a significant pivot, which can prove to be more expensive and cumbersome to manage.
So, how does one have access to this promised land?
Traditional data collection and analysis tools may not be effective when companies are trying to survive the wave of competition. Companies today produce a volume of data which is too large for traditional analytics solutions to analyze. As a result, significant insights are often overlooked.
Predictive analysis software and solutions use “intelligent” assessments to enable companies to drive business strategy and performance and build in small corrective actions. These tools help companies mine undiscovered business blind spots and gain actionable insights to build on their strengths and mitigate upcoming roadblocks.
In closing, the benefits to be reaped by data are not just limited to business bottom lines. If data today is increasingly leveraged to make real-time business decisions, why wouldn’t the data relative to planning and execution outcomes be perceived in the same manner? It is vital for businesses to know where they stand vs. where they “perceive” they stand, be open to absorbing insights driven by data to reshape decisions for higher impact. With the right plan in place and tools to know where you stand, your business can take advantage of the opportunities provided by predictive data analytics and distinguish itself from competitors.