Many start-ups never get past their first few years of existence. According to the U.S. Bureau of Labor Statistics, roughly 20% of American small businesses fail within the first year. By the end of their fifth year, that number goes up to 50%.1
Even given this reality, 54% CEOs of the largest corporations of the world (the Global 2000) fear startups in their sector more than their traditional (often hundred-year-old) competitors.2 All this research comes from a seven-year project centered around the idea of the DNA for digital success that ended up as a Wall Street Journal bestselling book called. The Digital Helix: Transforming Your Organization’s DNA to Thrive in the Digital Age.
That is the power of startups in the overall economy where they are increasingly seen as the engine of change. This is especially notable in the technology sector where 73% of the executives in the Global 2000 told us they feared startups more than their traditional competitors. At the opposite end of this scale were oil and utility executives with a startup fear factor of just 13%.3
Getting digital scale is the ultimate success story for a startup. Appearing near infinitely large while retaining the agility and energy of a startup is the ideal state. When technology startups get it right, they focus on two core constituents that major corporations find incredibly challenging.
It’s this DNA that delivers the success that makes them unique. The first component is the need to build around a culture and a need to be able to be constantly on. The second component is the need to build a virtual infrastructure as the common practice.
🤝 Is your tech startup’s team collaborating as effectively as it can to provide good customer service?
Think of it as a blank slate in every way for a startup
Sean Ellis, the award-winning author of Growth Hackers said in an interview on Forbes’ Futures in Focus podcast that “A startup is a blank slate. (We) were able to be super deliberate with a company like Dropbox when we were less than 10 employees from day one (to) think about what (were) the set of experiments that (were) likely going to lead to breakout results and how do we push through those initial experiments to get the full team excited about this experimentation process and engaged in the experimentation process.”
That blank slate is an opportunity to get it right on a number of fronts all at the same time.
Component 1 for success: You have to be constantly “on” with a startup
The typical tendency is to put technology and infrastructure as one of the last components that need to be invested in for a startup. Technology-based startups rarely talk about their communication and collaboration needs and technology before they sign up for that first office space. People sit so close to each other (pre-COVID-19) that it hardly seems logical.
That is a mistake because great collaboration technologies will amplify the productivity and value of the ongoing communications between employees and team members, in or out of the office, and also with suppliers and customers.
On average, startup CEOs work on average 80 hours a week. Their employees often work just as long, and that means 30% of the weekly work does not occur in an office.4 This means that the type of communications systems that are used are vital (in and out of the office). This is the idea of a constantly-on working environment for messaging, video, phone, document sharing, etc.
One element in The Digital Helix that stands out here is the evidence that cultures that focus on the idea of all employees feeling responsible to each other all the time thrive three times more than organizations that do not believe in that idea. This requires the constant access and sharing driven by the right collaboration backbone, 24/7/365. This is just not a decision that should be left to month six or 12 for a startup.
Component 2 for success: Virtual infrastructure is the new norm because it drives success
“All cloud, all the time” should be the mantra for a startup. It generally is, but in order to thrive, this has to be connected to the ideas and practices of the organization too, and these ideas require a constant mindset to share, collaborate, innovate, experiment, and adjust strategy together while keeping costs at a very low level. Anything that aids that on a moment-by-moment basis, day in and day out, is what drives success.
Take a simple example like this. Virtual infrastructure without the burdens of traditional setup costs aid these ideas. 99% of startups are unlikely to have a cyber security expert5, but their products and services will be as vulnerable as those that have them, so they need virtual capabilities. Digital companies with a focus on virtual infrastructure are 75% more likely to be thriving (economically) than companies still trying to build mostly in house.6
Virtual everything is the new norm for startups. The ability to virtualize infrastructure, look for constant mechanisms to drive innovation with efficient and effective delivery, and the capacity to live and thrive with experimentation are the core forms of strategy that drive success for startups.
Virtual infrastructure is the right way to respond to a world of constant change. Organizations that focus on virtual infrastructure (pay as you go) are 350% more likely to thrive in a world of constant change than their peers.7 The research behind The Digital Helix showed that startups that get all the above factors right at the same time, especially tech startups, were 93% guaranteed to be thriving.8 Given the immense challenges of bringing great ideas to market, any infrastructure that can offer a positive support to that process has to be utilized and not left as an afterthought of infrastructure.
Startup success is more than an idea. It’s about a combination of things. UCaaS (Unified Communications as a Service) is a major contributor to driving success because it connects these needs for virtual infrastructure and constantly on with the day-to-day needs of a startup. Being built on one flexible, secure platform that is available to you wherever, whenever, and for whatever you need it for is like adding 10 employees to your organization. It allows you to be the collective best versions of yourselves as you look to be one of those startups the leaders of Global 2000 corporations fear.
1 fundera.com/blog/what-percentage-of-small-businesses-fail#sources
2, 3, 5, 6, 7, 8 inc.digital – Digital DNA research
4 forbes.com/sites/quora/2018/04/30/the-truth-behind-the-80-hour-startup-workweek
Originally published Sep 07, 2020, updated Oct 05, 2020
