Nearly all startups fail to scale up.
There — we got the bad news out of the way. The good news: it’s possible to greatly shorten the odds by following a few simple rules.
A report on recent MIT research lays out some pointers:
“Compared to average startups, which have a one in 3,500 chance of experiencing growth, the top one percent of firms with these characteristics have a much better chance (one in 100) of taking off. New startups are four times more likely than the average startup to grow if they are a corporation, two and a half times more likely if they have a short name, and five times more likely if they have trademarks. Furthermore, firms that apply for patents are 35 times more likely to grow. And, curiously, eponymously named firms are a whopping 70 percent less likely to grow.”
There’s more, but in a nutshell:
- Use a short name (not the founder’s name!)
- Nail down your trademarks
- Apply for patents
- Locate in a high-tech region:
- Silicon Valley
- Southern California
- Washington state
- New York / Boston
Oh, and let’s add the standard principles for business success:
- Provide a product or service people need and love
- Make what you sell vastly better in some important way
- Hire excellent people you can get along with
- Stay focused on results (instead of signs of your own importance)
- Work your butt off for 4 years or more
What could be simpler? Now get to it.